Bond Market Update

Sitting on Lows

• U.S. Treasuries trade on their lows after facing continued pressure since their brief opening bounce attempt. Treasuries tried to put together a rally with help from the weak Retail Sales report for July (-0.6%; Briefing.com consensus 0.2%), but the market quickly found resistance after the report was released. The 10-yr note was back in the red just a few minutes after the cash start, followed by continued selling through the morning that has returned the benchmark yield to its closing level from Tuesday. This leaves the 10-yr yield up two basis points for the week while the 2-yr yield is down six basis points from last Friday's settlement thanks to the July CPI and PPI reports that were not as bad as feared. The long bond has underperformed this week with its yield currently up six basis points from last Friday.
• Yield Check:
  • 2-yr: +1 bp to 4.15%
  • 3-yr: +2 bps to 4.23%
  • 5-yr: +3 bps to 4.35%
  • 10-yr: +4 bps to 4.68%
  • 30-yr: +5 bps to 5.27%