Bond Market Update

Data Recon

• Total retail sales increased 0.7% month-over-month in November (Briefing.com consensus 0.5%) following an upwardly revised 0.5% (from 0.4%) in October. Excluding autos, retail sales were up a more modest 0.2% month-over-month (Briefing.com consensus 0.4%) following an upwardly revised 0.2% (from 0.1%) in October.
  • The key takeaway from the report is in the ex-auto number, which was up modestly and a reflection of some softening spending activity given that it is not adjusted for price changes. In other words, the overall sales increase, excluding autos, appears to be more price driven than volume driven.
• Yields have come in following the retail sales report with longer-dated maturities leading the move.
• Yield check:
  • 2-yr: +3 bps to 4.27%
  • 3-yr: +3 bps to 4.25%
  • 5-yr: +2 bps to 4.27%
  • 10-yr: +1 bp to 4.41%
  • 30-yr: -1 bp to 4.60%