Bond Market Update

Defending Early Gains

• U.S. Treasuries trade a touch above their opening levels with the belly maintaining its early strength. Longer-dated Treasuries briefly slipped to fresh lows in immediate reaction to the April CPI report, which was cooler than expected at the headline (0.2%; Briefing.com consensus 0.3%) and core (0.2%; Briefing.com consensus 0.3%) levels. As a result, the year-over-year headline CPI rate decelerated to 2.3% from 2.4% in March while core CPI was up 2.8% year-over-year for the second month in a row. The dip in 10s and 30s was reversed quickly, with the market returning to early highs.
• Yield Check:
  • 2-yr: -2 bps to 3.98%
  • 3-yr: -3 bps to 3.96%
  • 5-yr: -4 bps to 4.07%
  • 10-yr: -1 bp to 4.45%
  • 30-yr: +1 bp to 4.90%