Bond Market Update

Short End Lags

• U.S. Treasuries have seen some recent divergence as the 2-yr note slipped to a fresh low for the day while 10s and 30s trade a bit above their lows that were notched about 90 minutes after the cash start. The underperformance up front has taken place alongside some upward pressure on crude oil, which has lifted it to $85/bbl. With oil now up almost $20/bbl off its July low, the market is once again pricing in the likelihood of more stubborn inflation in the near term, which leaves the 2-yr yield just five basis points below its 2026 high.
• Yield Check:
  • 2-yr: +4 bps to 4.25%
  • 3-yr: +4 bps to 4.29%
  • 5-yr: +4 bps to 4.36%
  • 10-yr: +3 bps to 4.63%
  • 30-yr: +2 bps to 5.13%