Bond Market Update

Gains Maintained

• U.S. Treasuries have seen a continuation of their sideways drift, which is keeping yields near levels seen at the start of today's session. Today's advance, which is taking place alongside a weak showing in equities, has returned the 10-yr yield to its 200-day moving average (4.234%) while the 2-yr yield is on track for its lowest settlement since early October as the market expresses some newfound concerns about growth. These concerns are not leading to calls for a rate cut at next week's FOMC meeting, but there are some renewed hopes for a cut in May with the fed funds futures market pricing in a 38.9% implied likelihood of a cut, up from 36.9% on Friday.
• Yield Check:
  • 2-yr: -7 bps to 3.93%
  • 3-yr: -8 bps to 3.93%
  • 5-yr: -9 bps to 4.00%
  • 10-yr: -8 bps to 4.23%
  • 30-yr: -7 bps to 4.55%