Bond Market Update

Data Recon

• Total housing starts declined 3.1% month-over-month to a seasonally adjusted annual rate of 1.311 million units (Briefing.com consensus 1.340 million) with single-unit starts down 6.9%. Building permits were down 0.6% month-over-month to a seasonally adjusted annual rate of 1.416 million (Briefing.com consensus 1.441 million) with single-unit permits up just 0.5%.
  • The key takeaway from the report is that it included some weather impact from the hurricanes, evidenced by a 10.2% month-over-month decline in starts in the South -- the nation's largest homebuilding region -- but overall it was a generally soft report on a year-over-year basis with total starts down 4.0% and total permits down 7.7%.
• Yield Check:
  • 2-yr: -3 bps to 4.25%
  • 3-yr: -4 bps to 4.21%
  • 5-yr: -5 bps to 4.23%
  • 10-yr: -6 bps to 4.36%
  • 30-yr: -5 bps to 4.56%