Long End Leads as Bonds Consolidate Near Highs

U.S. Treasuries consolidated near the session low yield/high price levels Friday following a mixed bag of data which showed gross domestic product (GDP) rose less than expected and durable orders fell but consumer sentiment beat consensus, but fanned inflation concerns. The long end has led the move higher along with global bonds, benefiting from falling equities and oil. The 10-year has pushed back to Wednesday levels after hitting the lowest in a month Thursday.

The 30-year recently traded near 3.075% from an early 3.1066% low and a 3.09% close Thursday. The 10-year has been held near 2.495% from an overnight low of 2.5285% and a close near 2.51% The five-year has been straddling 1.95% from a 1.9905% overnight low and 1.96% Thursday. The two-year has lagged, knocking around the 1.22% point from a 1.252% low and a close near 1.225%.

The curve trade has leaned a long a somewhat flatter slope saw a steeper slope with the spread between the two- and 10-year yields tightened to 1.27 plus from 1.28 plus Thursday while the differential between the five- and 30-years narrowed to near 1.12 from 1.13.

By Bryan Smith