Bond Market Update

Looking to Bounce

• U.S. Treasuries started the day in negative territory, but there has been some early resilience, which has lifted the 5-yr note and shorter tenors into positive territory. The lower open lifted the 30-yr yield to a fresh 52-week high, but the entire complex found support immediately after the start. The bounce has been paced by the short end, receiving some assistance from a below-consensus ADP Employment Change report for December (122,000; Briefing.com consensus 131,000), which preceded the release of a solid weekly jobless claims report (201,000; Briefing.com consensus 218,000; prior 211,000) that showed an unexpected drop in initial claims. Equities started the day with slim losses, though the S&P 500 (-0.1%) is fighting to reclaim its flat line with encouragement from the early bounce in Treasuries.
• Yield Check:
  • 2-yr: -4 bps to 4.26%
  • 3-yr: -2 bps to 4.34%
  • 5-yr: -1 bp to 4.45%
  • 10-yr: UNCH at 4.69%
  • 30-yr: +2 bps to 4.93%