Bonds & Rates
Yields ease, but the long end stays elevated
Treasury yields drift lower on the day even as rate levels remain high by recent standards.
Treasury yields pull back, with the 5-year down 0.5% to 4.834%, the 10-year down 0.7% to 4.963%, and the 30-year down 0.7% to 5.296%. Even after the dip, all three are still well above the levels implied by their 50-day and 200-day averages.
Credit markets are firmer on the day. LQD rises 0.4%, HYG gains 0.2%, and MUB is nearly flat, down 0.0%.
The rate backdrop comes alongside Reuters headlines about hawkish Fed commentary and the dollar at two-month highs. CNBC also reports nearly 10% of borrowers are choosing riskier mortgages as rates move above 7%.
The bond tape is still stretched. The 5-year and 10-year both show RSI readings above 70, which underscores how quickly yields have run in recent weeks even after today’s pullback.