Bond Market Update

Early Gains Sustained

• U.S. Treasuries have added to their starting gains, lifting the long bond into positive territory. The market has maintained its early strength thanks in part to a modest dip in the price of oil, which has also been supportive for equities, as the S&P 500 rises 0.4% in early trade. The market received a big batch of data today, which showed a downward revision to Q4 GDP, a January Personal Income/Outlays report, which showed an uptick in the core PCE Price Index, and a Durable Orders report that featured a solid increase in business investment. Not long ago, the market learned that Job openings increased to 6.946 million in January from a revised 6.550 million (from 6.542 million) in December and it also received the Consumer Sentiment Index from the University of Michigan.
• The preliminary reading of the University of Michigan Consumer Sentiment for March fell to 55.5 (Briefing.com consensus 55.7) from the final reading of 56.6 for February. In the same period a year ago, the index stood at 57.0.
  • The key takeaway from the report is that roughly half of the interviews were conducted before military action in Iran, which spurred a rally in energy prices. Therefore, the Consumer Sentiment Index is likely to be revised lower in the final reading for March.
• Yield Check:
  • 2-yr: -6 bps to 3.70%
  • 3-yr: -6 bps to 3.72%
  • 5-yr: -5 bps to 3.84%
  • 10-yr: -3 bps to 4.25%
  • 30-yr: -1 bp to 4.87%