Bond Market Update

Sitting on Lows

• U.S. Treasuries trade on their lows after a steady retreat from their starting levels. The trading day started with slight gains in longer tenors while the short end lagged, but the entire complex began facing pressure after the cash start. The selling has continued over the past 45 minutes with Treasuries reaching lows after the release of the ISM Services Index for September (50.0%; Briefing.com consensus 51.7%, 52.0%) even though the reading pointed to no month-over-month change in activity in the services sector while the market expected to see modest growth. The early selling has returned yields on 5s and shorter tenors to morning highs from yesterday while yields on 10s and 30s are a bit below their peaks from yesterday.
• Yield Check:
  • 2-yr: +1 bp to 3.56%
  • 3-yr: +2 bps to 3.58%
  • 5-yr: +2 bps to 3.70%
  • 10-yr: +2 bps to 4.11%
  • 30-yr: +1 bp to 4.70%