Bond Market Update

Opening Losses Narrowed

• U.S. Treasuries have risen off their opening lows, though the entire complex remains in negative territory. Treasuries marked session lows shortly after the cash start, just as the market received today's first batch of data, which included a larger-than-expected drop in weekly initial claims (to 206,000 from 229,000; Briefing.com consensus 225,000), a widening in the trade balance for December (-$70.3 bln; Briefing.com consensus -$55.8 bln; prior -$53.0 bln), and an improvement in the Philadelphia Fed survey (16.3; Briefing.com consensus 8.5; prior 12.6) for January. The ensuing rebound has lifted action above today's starting levels with Treasuries remaining near rebound highs after the release of a disappointing Pending Home Sales report for January (-0.8%; Briefing.com consensus 1.4%; prior -9.3%). Equities are off to a soft start with the S&P 500 (-0.2%) narrowing this week's gain to 0.4%.
• Yield Check:
  • 2-yr: +1 bp to 3.47%
  • 3-yr: +2 bps to 3.51%
  • 5-yr: +1 bp to 3.66%
  • 10-yr: +1 bp to 4.09%
  • 30-yr: +1 bp to 4.72%