Bond Market Update

Solid GDP Weighs

• U.S. Treasuries trade on their lows after retreating in reaction to the advance reading of Q2 GDP (3.0%; Briefing.com consensus 2.5%), which was comfortably ahead of estimates. In addition to the solid GDP reading, the market received a solid ADP Employment Change report, which pointed to the addition of 104,000 nonfarm payrolls in July (Briefing.com consensus 78,000) after a decrease in June. The market continues its wait for the July FOMC Statement at 14:00 ET, but the U.S. Treasury released its quarterly refunding statement this morning, revealing that the frequency of nominal buybacks of longer-dated Treasuries will be increased. The Treasury also announced that next week will bring sales of 3-, 10-, and 30-yr debt.
• Yield Check:
  • 2-yr: +2 bps to 3.90%
  • 3-yr: +4 bps to 3.86%
  • 5-yr: +4 bps to 3.95%
  • 10-yr: +4 bps to 4.37%
  • 30-yr: +3 bps to 4.90%