Bond Market Update

Opening Surge Defended

• U.S. Treasuries have added to their strong opening gains with the belly maintaining its lead. Treasuries began the day on a sharply higher note, building on their opening advance after today's initial batch of economic data showed a narrowing in the trade deficit (to $122.7 bln from $130.7 bln) and an uptick in continuing claims (1.903 mln) to a level not seen since late 2001, which was somewhat masked by a decrease in initial claims (to 219,000 from 225,000). Treasuries reached their best levels after the ISM Services Index for March (50.8%; Briefing.com consensus 53.2%) showed a bigger-than-expected deceleration in growth. Equities are under pressure, sending the S&P 500 (-4.0%) to its lowest level since early September.
• Yield Check:
  • 2-yr: -18 bps to 3.72%
  • 3-yr: -21 bps to 3.68%
  • 5-yr: -22 bps to 3.74%
  • 10-yr: -17 bps to 4.02%
  • 30-yr: -10 bps to 4.45%