Bond Market Update

Early Losses Recovered

• U.S. Treasuries trade in the green after rebounding from their lower start. The trading day started with losses across the curve, but the market bounced in reaction to today's big batch of data, which showed some weakening in the economy with April Personal Income showing no growth (Briefing.com consensus 0.5%) while the core PCE Price Index accelerated to 3.3% from 3.2% in March. The market also received the Durable Orders report for April, which showed a big headline increase (7.9%; Briefing.com consensus 1.7%) that was owed to a spike in nondefense aircraft orders while nondefense capital goods spending excluding aircraft—a proxy for business spending—decreased 1.1%. In addition, Q1 GDP was revised down to 1.6% (Briefing.com consensus 2.0%) from 2.0%. The weak set of data returned Treasuries to little changed while another push to highs took place during the past 30 minutes in response to reports of a breakthrough in U.S.-Iran negotiations.
• Yield Check:
  • 2-yr: -1 bp to 4.02%
  • 3-yr: -1 bp to 4.07%
  • 5-yr: -2 bps to 4.16%
  • 10-yr: -2 bps to 4.46%
  • 30-yr: -2 bps to 4.99%