Bond Market Update

Data Recon

• Longer-dated U.S. Treasuries trade on their lows after a quick retreat from their starting levels while shorter tenors have shown some relative strength, hanging onto slim gains.
• The ISM Services PMI decreased to 54.9% in September (Briefing.com consensus: 55.7%) from 55.4% in August. The dividing line between expansion and contraction is 50.0%, so the September reading reflects services sector activity growing at a slightly slower pace than the prior month.
  • The key takeaway from the report is the understanding that the prices paid by services organizations continue to increase. In turn, that will continue to feed concerns about pass-through effects for consumers.
• Yield Check:
  • 2-yr: UNCH at 4.82%
  • 3-yr: -1 bp to 4.95%
  • 5-yr: UNCH at 5.06%
  • 10-yr: +2 bps to 5.30%
  • 30-yr: +3 bps to 5.66%