Fixed Income Update
The bond market is well bid, with extended buying into the long end, following this morning’s worse-than-expected jobless claims and July CPI data. The 30yr, up 0.75% to 116-30, knee-jerked lower on the data, but is now leading the charge after bottoming out just above its 9-day moving average at 115-29. The 10yr is up 0.3% to 115-23 and is trading near session highs (also after bottoming out just above its 9-day moving average at 115-05 earlier).
Yields are under pressure with the 30yr yield down nearly 5bps to 4.51%, the 10yr yield down 4bps to 3.89%, the 5yr yield down 3bps to 3.16%, and the 2yr yield down 1bp at 2.45%. The short end of the curve is nearly unchanged with the 4week bill yield stuck at 1.79% and the 3month yield at 1.83%.
Fed fund futures still show an 84% chance the Fed will leave rates unchanged in September.