Bond Market Update

Holding Onto Gains

• U.S. Treasuries trade near their starting levels after dipping from their early highs. The market climbed out of the gate right as investors received a solid ADP Employment Change report for April (109,000; Briefing.com consensus 79,000), reaching highs about 20 minutes after the start. However, resistance showed up near intraday highs from Friday, resulting in some backtracking over the past hour. Still, Treasuries are holding onto solid gains amid ongoing hopes that the Iran conflict will be resolved soon, which is being reflected in a lower price of oil. Separately, the U.S. Treasury released its quarterly refunding statement this morning, announcing that additional funding needs will be met through 3-, 10-, and 30-yr note and bond auctions next week. These auctions will raise new cash of about $41.7 bln while the balance of the Treasury's financing needs will be met through regularly scheduled auctions. Equities are off to a strong start with the S&P 500 (+0.8%) extending this week's gain to 1.2%.
• Yield Check:
  • 2-yr: -6 bps to 3.88%
  • 3-yr: -7 bps to 3.90%
  • 5-yr: -6 bps to 4.01%
  • 10-yr: -5 bps to 4.36%
  • 30-yr: -4 bps to 4.94%