Bond Market Update

Divergence Widens

• U.S. Treasuries continue trading mixed after seeing a continuation of their early divergence. The 5-yr note and shorter tenors have added to their early gains while longer tenors have widened their losses after today's Durable Orders report showed solid business investment in July while the recently-released Consumer Confidence report (97.4; Briefing.com consensus 96.3) beat expectations, but also showed that average 12-month inflation expectations rose to 6.2% from 5.7%. The early selling in longer tenors has the 30-yr yield within two basis points of its August high (4.954%). Equities are off to a slightly higher start with the S&P 500 (+0.1%) trailing the Nasdaq (+0.2%).
• Yield Check:
  • 2-yr: -4 bps to 3.69%
  • 3-yr: -4 bps to 3.64%
  • 5-yr: -2 bps to 3.76%
  • 10-yr: +1 bp to 4.28%
  • 30-yr: +5 bps to 4.94%