Bond Market Update

Early Weakness Persists

• U.S. Treasuries remain in negative territory with all tenors sitting a bit below their starting levels. Treasuries slumped out of the gate, seeing some additional weakness after a strong batch of economic data, which included a preliminary Q3 Productivity report that showed a strong increase in productivity (4.9%), combined with a decrease in unit labor costs (-1.9%). The market also received a surprisingly good trade balance report for October (-$29.4 bln; Briefing.com consensus -$61.3 bln), which showed the smallest deficit since 2009. Initial Claims increased to 208,000, but that was after last week's very low reading of 200,000, and still below the Briefing.com consensus (217,000). Equities are off to a scattered start with the S&P 500 flat while the Nasdaq (-0.6%) lags.
• Yield Check:
  • 2-yr: +2 bps to 3.49%
  • 3-yr: +3 bps to 3.55%
  • 5-yr: +3 bps to 3.73%
  • 10-yr: +4 bps to 4.18%
  • 30-yr: +4 bps to 4.85%