Bond Prices Slide into a Lower Range in Lightened Trade – 10-Year 2.337%

U.S. Treasury prices stalled into a range late Monday with the two-year underperforming in slowing activity. The market waffled on the back of a mass attack overnight in Las Vegas and the turmoil surrounding the independence vote in Catalonia. The session saw a batch of better data with the September Institute of Supply Management’s (ISM) manufacturing measure jumping to a 13-year high while construction spending beat the expected rise in August.

The 30-year yield was held near the 2.865% versus a 2.8405%, an overnight 2.8929% high and 2.858% close Friday. The 10-year yield was stalled near 2.3365% from a 2.3195% low, 2.3427% high and 2.326% close. The five-year yield was near 1.9377% from a 1.9162% low, 1.9708% high and 1.928% Friday. The two-year yield was near 1.487% from a 1.4669% low, 1.5109% high and 1.479% close.

Atlanta Fed’s Q3 GDPNow gross domestic product estimate was boosted to 2.7% from 2.3% Friday thanks to Institute for Supply Management (ISM) Manufacturing and construction spending gains. The estimates for Q3 real consumer spending growth was boosted to 2.3% from 1.8% while forecasts for private fixed investment growth rose to 1.8% from 0.3%. The next GDPNow update is Thursday, October 5.

Dallas Federal Reserve President Robert Kaplan, cautioned he and his colleagues will have to “look hard” at raising rates in December, while expecting the Fed to remain patient in its policy approach. Though cyclical inflation pressures are building, he noted, structurally there are headwinds.

New issues filtered in with $600 million from John Deere split between a 21-month floating-rate notes (FRN) and a seven-year. United Mexican States is offering an expected $1.8 billion benchmark 30-year bond. American Campus Communities, Cleveland Electric and Wisconsin Power & Light each have $300 to $400 billion in 10-years. The Emirate of Abu Dhabi is reportedly working a five,-, 10-, and 30-years, they last offered $5 billion five- and 10-years in April 2016. The Kingdom of Jordan has $1 billion 30-years.

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