Bond Market Update

Data Recon

• The ISM Services PMI decreased to 52.1% in November (Briefing.com consensus 55.5%) from 56.0% in October. The dividing line between expansion and contraction is 50.0%, so the November reading reflects services sector activity decelerating from October.
  • The key takeaway from the report is that tariff concerns were mentioned often among respondents considering their outlooks.
• Factory orders increased 0.2% month-over-month in October following an upwardly revised 0.2% decline (from -0.5%) in September. Excluding transportation, factory orders rose 0.1% on the heels of a 0.1% increase in September. Shipments of manufactured goods fell 0.2% in October following a 0.4% decline in September.
  • The key takeaway from the report is that factory orders picked up following declines in the previous two months.
• Yield Check:
  • 2-yr: -1 bp to 4.16%
  • 3-yr: -1 bp to 4.12%
  • 5-yr: UNCH at 4.11%
  • 10-yr: +1 bp to 4.23%
  • 30-yr: +1 bp to 4.41%