Bond Market Update

September CPI Invites Bumpy Reaction

• U.S. Treasuries trade near their flat lines after facing some early volatility. The market started the day with modest losses that were erased in immediate reaction to the September CPI report, which was cooler than expected at the headline (0.3%; Briefing.com consensus 0.4%) and core (0.2%; Briefing.com consensus 0.3%) levels. The post-data rally lifted all tenors into positive territory, but Treasuries found resistance just above yesterday's highs, and they have given back the bulk of their early gains with the long bond returning into negative territory. On a related note, the White House said that the October CPI report is unlikely to be released until the government reopens.
• Yield Check:
  • 2-yr: -1 bp to 3.47%
  • 3-yr: -2 bps to 3.47%
  • 5-yr: -1 bp to 3.59%
  • 10-yr: UNCH at 3.99%
  • 30-yr: +1 bp to 4.59%