Bond Market Update

Higher Start Defended

• U.S. Treasuries trade on their highs with the 5-yr note showing slight relative strength. However, the start to the Monday session has been fairly quiet. Treasuries began inching up from their starting levels shortly after the open, reaching fresh highs after today's lone economic report—the ISM Manufacturing Index for December (47.9%; Briefing.com consensus 48.2%; prior 48.2%)—showed an accelerating contraction on a month-over-month basis. The higher start is keeping the 10-yr yield just below its high from December while the 30-yr yield briefly climbed above its December high at the open. Equities are off to a strong start with the S&P 500 (+0.8%) trailing the Nasdaq (+1.0%) by a couple steps.
• Yield Check:
  • 2-yr: -2 bps to 3.46%
  • 3-yr: -2 bps to 3.53%
  • 5-yr: -2 bps to 3.72%
  • 10-yr: -2 bps to 4.17%
  • 30-yr: UNCH at 4.68%