Bond Market Update

Range Narrows

• U.S. Treasuries remain near their rebound highs with the long bond defending a slim gain while the 10-yr note sits just below its flat line. The pace of the initial bounce off post-NFP lows slowed significantly in the late morning, as the market nestled into a narrow range. With the Labor Day holiday looming on Monday, it would not be surprising to see a continuation of the recent range-bound trade, considering some participants have likely taken off for the long weekend already. The August jobs report returned the implied probability of a September rate hike to 60%, but President Trump called for the opposite this morning. He said that a strong economy warrants a low rate and he threatened to stop trading with countries that the U.S. runs a trade deficit with. Equities remain modestly lower with the S&P 500 (-0.3%) on track to add 0.2% for the week.
• Yield Check:
  • 2-yr: +3 bps to 4.36%
  • 3-yr: +2 bps to 4.43%
  • 5-yr: +2 bps to 4.53%
  • 10-yr: UNCH at 4.76%
  • 30-yr: -2 bps to 5.23%