Bond Market Update

Long End Resists Early Pressure

• Longer-dated Treasuries are back near their starting levels after bouncing off their early lows. The market started the day with losses across the curve that were extended during the first hour of action, which included the release of an unexpected decrease in weekly Initial Claims (217,000; Briefing.com consensus 225,000; prior 221,000). The early selling lifted the 10-yr yield back above its 50-day moving average (4.410%) to a one-week high, but the recent bounce has returned the benchmark yield to its 50-day average. The rebound accelerated after the flash July S&P Global U.S. Manufacturing PMI (49.5; prior 52.9) showed a return to contraction while activity in the services sector accelerated with the flash July S&P Global U.S. Services PMI hitting 55.2, up from 52.9 in June. The rebound has been paced by the long bond while the 2-yr note remains not far above its early low.
• Yield Check:
  • 2-yr: +4 bps to 3.92%
  • 3-yr: +5 bps to 3.88%
  • 5-yr: +5 bps to 3.98%
  • 10-yr: +3 bps to 4.42%
  • 30-yr: +1 bp to 4.96%