Bond Market Update

Opening Gains Trimmed

• U.S. Treasuries continue trading in the green with longer tenors showing some relative strength. The market has dipped from its opening highs, but the pullback has been shallow. Treasuries showed almost no reaction to the release of below-consensus Housing Starts for April (1.361 mln; Briefing.com consensus 1.383 mln), dipping to lows after the just-released preliminary May reading of the University of Michigan's Consumer Sentiment Index (50.8; Briefing.com consensus 55.0). With today's early gains, the 10-yr yield is now up just three basis points since last Friday's settlement while the 2-yr yield remains seven basis points above last week's settlement. Equities are off to a slightly higher start with the S&P 500 (+0.1%) extending this week's gain to 4.6%.
• Yield Check:
  • 2-yr: -2 bps to 3.95%
  • 3-yr: -4 bps to 3.92%
  • 5-yr: -4 bps to 4.03%
  • 10-yr: -5 bps to 4.41%
  • 30-yr: -5 bps to 4.87%