Bond Market Update

Early Gains Defended

• U.S. Treasuries trade just above their starting levels, on track to record solid gains for the week. The market faced some brief pressure after the PPI report for January was hotter than expected at the headline (0.5%; Briefing.com consensus 0.3%) and core (0.8%; Briefing.com consensus 0.3%) levels. However, even with that unwelcomed surprise, the fed funds futures market now sees the likelihood of a June rate cut as a toss-up. Equities are off to a weak start with the S&P 500 (-0.7%) returning into negative territory for the week, on track to lose 1.1% for the month.
• Yield Check:
  • 2-yr: -4 bps to 3.41%
  • 3-yr: -5 bps to 3.41%
  • 5-yr: -5 bps to 3.54%
  • 10-yr: -4 bps to 3.98%
  • 30-yr: -2 bps to 4.65%