Bond Market Update

Long Bond Maintains Early Strength

• U.S. Treasuries have rallied off their opening lows with relative strength in the long bond returning it to levels seen on Thursday afternoon while shorter tenors remain a bit below their closing levels from Thursday. The 2-yr yield is up two basis points today and up five basis points from Thursday's settlement, capturing the market's reaction to a strong rebound in job growth in March. However, the market learned not long ago that the Employment Index (45.2%) in the March ISM Services report (54.0%; Briefing.com consensus 54.9%) fell into contraction, contrasting with the broader jobs report. Treasuries returned to their early highs with the long bond rising above its starting high after the market received the ISM report while equities are hanging onto their starting gains with the S&P 500 up 0.4%.
• Yield Check:
  • 2-yr: +2 bps to 3.85% (+5 bps from Thursday's settlement)
  • 3-yr: +1 bp to 3.87% (+4 bps from Thursday's settlement)
  • 5-yr: -2 bps to 3.97% (+2 bps from Thursday's settlement)
  • 10-yr: -2 bps to 4.33% (+2 bps from Thursday's settlement)
  • 30-yr: -3 bps to 4.89% (UNCH from Thursday's settlement)