Bond Market Update

Data Recon

• The current account deficit widened to $310.9 billion in the third quarter (Briefing.com consensus -$283.0 billion) from a downwardly revised $275.0 billion (from -$266.8 billion) in the second quarter.
• Total housing starts declined 1.8% month-over-month to a seasonally adjusted annual rate of 1.289 million units (Briefing.com consensus 1.347 million) while building permits increased 6.1% month-over-month to a seasonally adjusted annual rate of 1.505 million (Briefing.com consensus 1.430 million).
  • The key takeaway from the report is that single-unit starts were up 6.4%, led by a bounce back in the South (+18.3%) following the hurricanes; however, single-unit permits, a leading indicator, were up just 0.1%.
• Yield check:
  • 2-yr: -1 bp to 4.23%
  • 3-yr: unch at 4.22%
  • 5-yr: +1 bp to 4.26%
  • 10-yr: +3 bps to 4.41%
  • 30-yr: +2 bps to 4.60%