Bond Market Update

Pullback Deepens

• U.S. Treasuries have deepened their pullback from morning highs, lifting yields on most tenors back to their highs from yesterday while relative weakness in the 2-yr note has the 2-yr yield back at levels from Tuesday afternoon. The recent selling has taken place alongside a shaky showing from equities, as the S&P 500 (-0.2%) turns negative after giving back its opening gain. Still, the benchmark index remains on course to add 3.5% for the week, thanks to reduced fears about the potential for a broader U.S.-Iran conflict. Treasuries, however, are on course for a slightly lower finish to the week in 2s and 30s and a flat finish in the belly. The 2-yr yield is up one basis point from last Friday's settlement while the 30-yr yield is up three basis points for the week.
• Yield Check:
  • 2-yr: +3 bps to 3.81%
  • 3-yr: +2 bps to 3.83%
  • 5-yr: +3 bps to 3.95%
  • 10-yr: +3 bps to 4.32%
  • 30-yr: +2 bps to 4.92%