Bond Market Update

Early Gains Padded

• U.S. Treasuries trade at their best levels of the morning after adding to their starting gains. The early advance has been supported by an overnight retreat in the price of oil, though WTI crude has bounced strongly off its morning low of $99/bbl. The market has also received some international support from a rally in the U.K.'s Gilts after the Bank of England confirmed that it will stop sales of longer-term Gilts. As a result, the 30-yr Gilt yield is down 16 basis points at 5.22%, returning to its August low. This morning's economic data has had little impact on the market, as Initial Claims (196,000; Briefing.com consensus 209,000) remained inside a well-established range while August Housing Starts (1.275 mln; Briefing.com consensus 1.325 mln; prior 1.309 mln) and Building Permits (1.394 mln; Briefing.com consensus 1.410 mln; prior 1.433 mln) were on the weaker side. Reported a moment ago, Pending Home Sales growth in August (0.3%; Briefing.com consensus 0.5%; prior -2.6%) also missed expectations. Equities are off to a strong start with chip stocks helping send the Nasdaq (+1.3%) back to little changed for the week while the S&P 500 (+0.9%) has narrowed this week's loss to 0.5%.
• Yield Check:
  • 2-yr: -5 bps to 4.68%
  • 3-yr: -6 bps to 4.75%
  • 5-yr: -6 bps to 4.80%
  • 10-yr: -6 bps to 4.95%
  • 30-yr: -4 bps to 5.31%