Bond Market Update

Sitting Near Highs

• Recent action saw the long bond inch to a fresh high while shorter tenors remain just below their best levels that were reached in immediate reaction to the weak jobs report for August. The disappointing report essentially assured the market that a 25-basis point rate cut will be announced on September 17 and the implied likelihood of a 50-basis point decrease has jumped to 11.8% from yesterday's 0.0%. The post-data rally has sent the 30-yr yield back to its 200-day moving average (4.771%) while the 10-yr yield is back at levels from April. Up front, the 2-yr yield started the day at a one-year low, but today's buying has pressured it to a three-year low.
• Yield Check:
  • 2-yr: -11 bps to 3.48%
  • 3-yr: -10 bps to 3.45%
  • 5-yr: -10 bps to 3.56%
  • 10-yr: -10 bps to 4.07%
  • 30-yr: -10 bps to 4.78%