Bond Market Update

Short End Turns Lower

• U.S. Treasuries have retreated from their early highs, pressuring the 5-yr note and shorter tenors into negative territory. Treasuries added to their starting gains during the first hour of action, but the next hour saw a swift reversal as the market cast doubt on the series of recent reports that a peace deal with Iran is just around the corner. In addition, Fed Governor Waller said that he would need to see an improvement in inflation or a significant deterioration in the labor market to consider a rate cut, which has also weighed on Treasuries. Crude oil, meanwhile, continues hovering just below $98/bbl.
• Yield Check:
  • 2-yr: +3 bps to 4.12%
  • 3-yr: +2 bps to 4.17%
  • 5-yr: UNCH at 4.26%
  • 10-yr: -1 bp to 4.57%
  • 30-yr: -2 bps to 5.09%