Bond Market Update

Opening Losses Recovered

• U.S. Treasuries trade just below their best levels of the morning after bouncing off their opening lows in reaction to the August PPI report, which was cooler than expected at the headline (-0.1%; Briefing.com consensus 0.3%) and Core (-0.1%; Briefing.com consensus 0.3%) levels. In addition, hot readings from July were revised down a bit. The PPI report is keeping the market confident that at least a 25-basis point rate cut will be announced next Wednesday and it also shows that producers have not been able to pass price hikes onto consumers in August, which invites more questions about the strength of the economy. Equities started the day on a higher note with the S&P 500 (+0.6%) extending this week's gain to 1.1%.
• Yield Check:
  • 2-yr: -2 bps to 3.52%
  • 3-yr: -2 bps to 3.48%
  • 5-yr: -2 bps to 3.59%
  • 10-yr: -1 bp to 4.06%
  • 30-yr: +1 bp to 4.72%