Bond Market Update

Losses Widened

• U.S. Treasuries have widened their early losses with the belly at the forefront of the selling, which is lifting yields on the 5-yr note and longer tenors to fresh highs for the week. Treasuries began adding to their losses shortly after the cash open even though the PPI report for March showed month-over-month deflation in the headline (-0.4%; Briefing.com consensus 0.1%) and the Core PPI rate (-0.1%; Briefing.com consensus 0.3%). Treasuries are staying near their early lows after the preliminary reading of the University of Michigan's Consumer Sentiment Index for April (50.8; Briefing.com consensus 54.8) came in below expectations, showing an acceleration in one-year (to 6.7% from 5.0%) and five-year (to 4.4% from 4.1%) inflation expectations. Equities hold slim early gains with the S&P 500 (+0.1%) just behind the Nasdaq (+0.2%).
• Yield Check:
  • 2-yr: +8 bps to 3.93%
  • 3-yr: +13 bps to 4.01%
  • 5-yr: +15 bps to 4.18%
  • 10-yr: +15 bps to 4.54%
  • 30-yr: +8 bps to 4.93%