Bond Market Update

Data Recon

• Total industrial production decreased 0.1% month-over-month in November (Briefing.com consensus 0.3%) following a downwardly revised 0.4% decline (from -0.3%) in October. The capacity utilization rate fell to 76.8% (Briefing.com consensus 77.3%) from a downwardly revised 77.0% (from 77.1%) in October. Total industrial production declined 0.9% yr/yr while the capacity utilization rate was 2.9 percentage points below its long-run average.
  • The key takeaway from the report is that industrial production didn't show any strong rebound from the prior two months that were adversely impacted by the hurricanes. There was some modest strength in manufacturing output, but total industrial production is still lagging.
• Yield check:
  • 2-yr: +2 bps to 4.26%
  • 3-yr: +1 bp to 4.23%
  • 5-yr: +1 bp to 4.26%
  • 10-yr: unch at 4.40%
  • 30-yr: -2 bps to 4.59%