Bond Market Update

Mixing It Up

• Treasury yields have backed off today's highs but remain above yesterday's settlement levels following today's batch of economic data that included data on retail sales, initial jobless claims, business inventories, pending home sales, and homebuilder confidence.
• Collectively, the data could be characterized as "mixed," but the higher-level releases (retail sales and initial claims) were among the stronger ones. Granted retail sales looked soft at the headline level, but that was owed to falling gasoline station sales (-5.3%). Take those out, and retail sales were up a solid 0.7%.
• Separately, June pending home sales (-5.4%) and the NAHB Housing Market Index (34) were disappointments on a relative and absolute basis.
• Treasuries, it seems, are yielding to the stronger data and are paying some heed to oil prices that are sticky near the $80.00/bbl mark.
• Notably, stocks are weak today, but that isn't triggering any safe-haven flight to Treasuries.
• Yield check:
  • 2-yr: +4 bps to 4.17%
  • 3-yr: +4 bps to 4.22%
  • 5-yr: +4 bps to 4.30%
  • 10-yr: +3 bps to 4.58%
  • 30-yr: +2 bps to 5.10%.