Bond Market Update

Shorter Tenors Ahead

• Longer-dated U.S. Treasuries continue trading near their starting levels after seeing some early volatility while shorter tenors have added to their early gains. Treasuries followed their modestly higher start with a brief pullback in reaction to the November Employment Situation report, which showed a much bigger-than-expected increase in Nonfarm Payrolls (64,000; Briefing.com consensus 30,000), which overshadowed a 105,000 drop in October payrolls. The market also received the Retail Sales report for October (0.0%; Briefing.com consensus 0.3%), which missed estimates, but Retail Sales ex-auto (0.4%; Briefing.com consensus 0.3%) beat estimates. The post-data pullback was followed by an immediate bounce that has returned the long bond to its starting level while shorter tenors are holding onto a bigger portion of their early gains. Equities are off to a lower start with the S&P 500 falling 0.4%.
• Yield Check:
  • 2-yr: -3 bps to 3.48%
  • 3-yr: -3 bps to 3.53%
  • 5-yr: -3 bps to 3.70%
  • 10-yr: -2 bps to 4.16%
  • 30-yr: -1 bp to 4.84%