Bond Market Update

Opening Losses Narrowed

• U.S. Treasuries trade a bit above their opening levels, though most tenors remain in negative territory while the 2-yr note has returned to little changed. Treasuries received a boost off their lows after Fed Governor Waller spoke positively about the potential for a rate cut as early as July. The comments have caught the market's attention, though expectations for a July cut remain reserved with the fed funds futures market showing just a 14.5% implied likelihood of a change to the fed funds rate range at that time. The market received the Leading Index for May (-0.1%; Briefing.com consensus -0.1%) not long ago, which showed an in-line dip that was coupled with a downward revision to April's reading (to -1.4% from -1.0%). Equities started the day in positive territory with the S&P 500 (+0.2%) extending this week's gain to 0.3%.
• Yield Check:
  • 2-yr: UNCH at 3.94%
  • 3-yr: UNCH at 3.90%
  • 5-yr: +1 bp to 4.01%
  • 10-yr: +3 bps to 4.42%
  • 30-yr: +4 bps to 4.93%