Bond Market Update

Gains Extended

• Recent action saw the 10-yr note and shorter tenors poke above their late morning highs while the long bond remains a bit below its best level of the day, though it too holds a solid gain. Today's rally has pressured yields back to levels from mid-March, thanks to a growing sense of optimism that the Iran conflict has essentially ended and that the Strait of Hormuz will reopen imminently. Crude oil has responded by falling toward $80/bbl, returning to levels seen during the first week of the conflict. Today's rally puts Treasuries on track for a strong finish to the week with the 2-yr yield down 12 basis points and 10-yr yield down nine basis points from last week's settlement.
• Yield Check:
  • 2-yr: -10 bps to 3.68%
  • 3-yr: -10 bps to 3.70%
  • 5-yr: -9 bps to 3.82%
  • 10-yr: -8 bps to 4.23%
  • 30-yr: -6 bps to 4.87%