Bonds Rise Amid Thin Trade, Citi Index at Feb Low

Bond yields are initially declining, cautioning investors against shorting a calm market with little economic risk today. Despite heavy corporate supply, bond prices are on an upward trajectory.
Thin trading volumes due to holidays in London and Japan, along with the Fed's Senior Loan Officer Opinion Survey, are contributing to the rise in US bonds, led by German bunds. Option investors are showing interest in higher prices through SOFR call structures.
The Citi Surprise Index hitting a low since February 2023 is also supporting the bid for Treasuries, with yields and the index moving in tandem in May. Demand remains strong in credit, even with 20 firms tapping corporate supply today.