Bond Market Update

Opening Gains Evaporate

• U.S. Treasuries have spent the first couple hours of action in a steady slide from their opening highs. The market began facing resistance immediately after the open with a recent thrust to lows in response to a strong ISM Manufacturing Index for January (52.6%; Briefing.com consensus 48.3%), which showed an unexpected expansion in activity, producing the highest reading since August 2022. The early reversal has sent the 5-yr yield back above its 200-day moving average (3.804%) while the 10-yr yield started the day just above the 200-day moving average of its own (4.231%) before pulling away from that level in recent trade. Equities have overcome a lower start with the S&P 500 rising 0.4% while precious metals are back to little changed.
• Yield Check:
  • 2-yr: +3 bps to 3.56%
  • 3-yr: +4 bps to 3.64%
  • 5-yr: +4 bps to 3.83%
  • 10-yr: +3 bps to 4.27%
  • 30-yr: +3 bps to 4.90%