Bond Market Update

Long End Paces Intraday Slide

• U.S. Treasuries trade on their lows after retreating from their starting levels. Treasuries started the day with slim gains in all tenors, but selling pressure began building immediately after the start. The selling took place as the market received a weekly Initial Claims report that showed a sharp drop in claims (to 231,000 from 264,000; Briefing.com consensus 245,000) and a Philadelphia Fed Manufacturing Index (23.2; Briefing.com consensus 3.0), which was much better than expected. The market also received a weak August Leading Indicators report (-0.5%; Briefing.com consensus -0.1%) from the Conference Board, but that release was met with a muted reaction. The early selling has been paced by the long end with the 30-yr yield rising toward its 200-day moving average (4.777%). Equities are off to a strong start with the S&P 500 (+0.7%) trailing the Nasdaq (+1.1%).
• Yield Check:
  • 2-yr: +3 bps to 3.58%
  • 3-yr: +3 bps to 3.56%
  • 5-yr: +3 bps to 3.68%
  • 10-yr: +4 bps to 4.11%
  • 30-yr: +5 bps to 4.73%