Bond Market Update

Bumpy Action in Early Trade

• U.S. Treasuries trade on their lows with longer tenors seeing a continuation of their early underperformance. The market spent the first hour of action in a rise that lifted all tenors into positive territory with some help from a disappointing ADP Employment Change report for February (77,000; Briefing.com consensus 145,000). Treasuries reached highs shortly after the release of the final S&P Global U.S. Services PMI, which showed an uptick to 51.0 from 49.7 in the preliminary reading, though it was down from January's final reading of 52.9. The market reversed from highs, sliding to new lows, after the release of the ISM Services Index for February (53.5%; Briefing.com consensus 53.0%) showed an acceleration in growth. Equities started the day in positive territory, but they have faced some early pressure that has returned the S&P 500 to its unchanged level.
• Yield Check:
  • 2-yr: -4 bps to 3.92%
  • 3-yr: -2 bps to 3.93%
  • 5-yr: UNCH at 4.00%
  • 10-yr: +2 bps to 4.23%
  • 30-yr: +2 bps to 4.54%