Bond Market Update

Short End Leads Morning Slide

• U.S. Treasuries have reversed from their slightly higher start after the Employment Situation report for August showed much stronger-than-expected Nonfarm Payrolls growth (162,000; Briefing.com consensus 45,000), which was coupled with an upward revision to the July reading (to +21,000 from -23,000). Average Hourly Earnings increased 0.3% (Briefing.com consensus 0.2%) and the July reading was also revised higher (to 0.2% from 0.1%). The post-data selling was paced by the short end, but once again, yields on 10s and shorter tenors have hit fresh highs for the year as expectations for a September rate hike increase back to 60%.
• Yield Check:
  • 2-yr: +6 bps to 4.39%
  • 3-yr: +5 bps to 4.46%
  • 5-yr: +5 bps to 4.55%
  • 10-yr: +2 bps to 4.78%
  • 30-yr: UNCH at 5.25%