Bond Market Update

Early Gains Narrowed

• U.S. Treasuries of most tenors remain in the green, though the first couple hours of trade have seen a steady retreat from opening highs. Treasuries reached their best levels of the morning during the first few minutes of action, just after the market received the ADP Employment Change report for December, which missed expectations, showing the addition of 41,000 nonfarm payrolls (Briefing.com consensus 45,000). The pullback from highs produced lows shortly after the market received the most recent batch of data, which included an upbeat ISM Non-Manufacturing Index for December (54.4%; Briefing.com consensus 52.2%), a larger-than-expected decrease in Factory Orders for October (-1.3%; Briefing.com consensus -1.0%), and a Job Openings and Labor Turnover Survey for November that showed a decrease in openings to 7.146 million from a downwardly revised 7.449 million (from 7.670 million) in October. Equities are off to a mixed start with the Nasdaq (+0.2%) outpacing the S&P 500 (-0.1%) by a small margin.
• Yield Check:
  • 2-yr: UNCH at 3.48%
  • 3-yr: -1 bp to 3.53%
  • 5-yr: -1 bp to 3.71%
  • 10-yr: -2 bps to 4.16%
  • 30-yr: -3 bps to 4.84%