Bond Market Update

Gains Extended After Cool CPI

• U.S. Treasuries trade just below their highs after rising from their starting levels in reaction to the January CPI report, which was cooler than expected at the headline level (0.2%; Briefing.com consensus 0.3%) with the year-over-year growth rate decelerating to 2.4% from 2.7% in December. Core CPI (0.3%; Briefing.com consensus 0.3%) matched expectations, but the year-over-year growth rate still decelerated to 2.5% from 2.6%. The post-data advance has pressured the 2-yr yield to a fresh low for the year with the 2025 low from October (3.378%) now just four basis points away. Equities are off to a flat start with the Nasdaq (-0.2%) showing some early weakness.
• Yield Check:
  • 2-yr: -5 bps to 3.42%
  • 3-yr: -5 bps to 3.46%
  • 5-yr: -5 bps to 3.62%
  • 10-yr: -4 bps to 4.07%
  • 30-yr: -3 bps to 4.71%