Bond Market Update

Trimming Early Losses

• U.S. Treasuries have climbed off their early lows, but not before initial selling resulted in fresh 2026 highs in yields on the 10-yr note and shorter tenors. Treasuries notched session lows at the start before bouncing steadily even though crude oil has sustained its overnight rise, which leaves it just above $88/bbl. The long bond opened ahead of shorter tenors, and it has turned positive during the past 30 minutes while the 2-yr note remains modestly lower for the day. Economic data released today showed some softness with the ISM Manufacturing Index (54.6%; Briefing.com consensus 55.3%; prior 55.6%) pointing to a slowdown in the pace of manufacturing growth in August while the Construction Spending report for July (-0.5%; Briefing.com consensus 0.2%) showed an unexpected decrease in activity. The S&P Global U.S. Manufacturing PMI for August was revised up to 53.9 from 53.2, leaving it at the same level seen in the final reading for July. Lastly, job openings increased to 7.271 million in July (Briefing.com consensus 7.390 mln) but that was from a downwardly revised 7.182 million (from 7.359 million) in June. Equities are facing some early pressure with the Nasdaq (-0.9%) leading to the downside while the S&P 500 (-0.4%) follows.
• Yield Check:
  • 2-yr: +1 bp to 4.36%
  • 3-yr: +1 bp to 4.42%
  • 5-yr: +1 b bp to 4.51%
  • 10-yr: UNCH at 4.76%
  • 30-yr: -1 bp to 5.24%