Bond Market Update

Selling Continues

• U.S. Treasuries have faced continued pressure since today's cash start with the 5-yr note remaining behind other tenors. The extension of the selling in Treasuries comes as oil rises to a fresh high for the day, nearing $106/bbl. Oil is up nearly $5/bbl today and up $10/bbl for the week as speculation builds about renewed military pressure on Iran. With today's selling, the 2-yr yield is now up 19 basis points for the week while the 10-yr yield is up 22 basis points from last week's settlement. This has shifted the market's rate expectations, with investors now pondering the possibility of a rate hike in January.
• Yield Check:
  • 2-yr: +9 bps to 4.08%
  • 3-yr: +11 bps to 4.14%
  • 5-yr: +13 bps to 4.25%
  • 10-yr: +12 bps to 4.58%
  • 30-yr: +10 bps to 5.11%