Bond Market Update

Diving After Hot CPI

• U.S. Treasuries are sliding to fresh lows for the month with the belly leading the way after January CPI (0.5%; Briefing.com consensus 0.3%) and core CPI (0.4%; Briefing.com consensus 0.3%) were hotter than expected. This resulted in an acceleration in the yr/yr CPI rate to 3.0% from 2.9% while core CPI accelerated to 3.3% yr/yr from 3.2% against hopes for a slowdown. The post-data selling has sent the 2-yr yield to its highest level since mid-January while yields on longer tenors are at three-week highs.
• Yield Check:
  • 2-yr: +9 bps to 4.38%
  • 3-yr: +10 bps to 4.41%
  • 5-yr: +12 bps to 4.49%
  • 10-yr: +11 bps to 4.64%
  • 30-yr: +9 bps to 4.84%