Bond Market Update

Gains dissipating

• The gains registered overnight in the futures trade have largely dissipated in the afternoon session.
• Once again, the 10-yr note yield ran into resistance as it worked its way toward 4.60%.
• With a large slate of data released today, there was no change of note in terms of the market's expectations for a rate hike at the July FOMC meeting. The probability of a 25-basis point hike sits at 10.2% now versus 10.7% yesterday, according to the CME FedWatch Tool. In turn, there has been a muted reaction to Dallas Fed President Logan's (FOMC voter) position that she "currently believes modestly higher interest rates would better balance the outlook and risks for the FOMC’s dual mandate goals."
• Yield check:
  • 2-yr: +3 bps to 4.16%
  • 3-yr: +2 bps to 4.20%
  • 5-yr: +2 bps to 4.28%
  • 10-yr: +1 bp to 4.56%
  • 30-yr: +1 bp to 5.09%