Bond Market Update

Resistance at 4.00%

• The 10-yr note yield hit 4.00% earlier but ran into resistance there, unable to move decisively into 3-handle territory.
• Yields across the curve are off their overnight lows but are still down for the most part relative to Friday's settlement, with some risk-off action in stocks lending a measure of support.
• U.S.-China trade tension is at the center of the early news cycle, as participants await Fed Chair Powell's speech at 12:20 p.m. ET on the economy and monetary policy.
• The government shutdown has stretched into day 14, so there are no government releases today. Earlier, though, the September NFIB Small Business Optimism Index checked in at 98.8, down from 100.8 in August.
• The CME FedWatch Tool currently shows a 96.7% probability of a 25-basis-point rate cut to 3.75-4.00% at the October FOMC meeting.
• Yield check:
  • 2-yr: -2 bps to 3.50%
  • 3-yr: -3 bps to 3.50%
  • 5-yr: -3 bps to 3.62%
  • 10-yr: -1 bp to 4.04%
  • 30-yr: unch at 4.63%