Bond Market Update

Growth Worries Offer Support

• U.S. Treasuries have built on their early gains with all tenors reaching fresh highs in recent trade. Treasuries spent the initial hour of action in a slow retreat from their starting levels, but they rallied to fresh highs after the ISM Manufacturing Index for March (49.0%; Briefing.com consensus 49.8%; prior 50.3%) showed that the manufacturing sector fell into contraction while price hikes continued. This report overshadowed an earlier release of the final S&P Global U.S. Manufacturing PMI for March, which showed an upward revision from the flash reading (to 50.2 from 49.8). With the post-data advance, the 10-yr yield is now within three basis points of its low from March. Equities are off to a lower start with the S&P 500 down 0.6%.
• Yield Check:
  • 2-yr: -5 bps to 3.86%
  • 3-yr: -7 bps to 3.84%
  • 5-yr: -9 bps to 3.89%
  • 10-yr: -11 bps to 4.14%
  • 30-yr: -11 bps to 4.51%