Bond Market Update

Data Recon

• U.S. Treasuries have recovered their opening losses in reaction to a cooler than expected PPI for March, which was released alongside a larger than expected decrease in weekly jobless claims.
• The March Producer Price Index for final demand (PPI) increased 0.2% month-over-month (Briefing.com consensus 0.3%) after increasing by 0.6% in February. The Producer Price Index for final demand, excluding food and energy (core PPI), also increased 0.2% month-over-month (Briefing.com consensus 0.2%) after increasing 0.3% in February. On a year-over-year basis, PPI was up 2.1% versus 1.6% in February while core PPI was up 2.4% versus 2.1% in February.
  • The key takeaway from the report is that even with the smaller than expected month-over-month increases, the year-over-year growth rates for PPI and core PPI accelerated.
• Initial jobless claims for the week ending April 6 decreased by 11,000 to 211,000 (Briefing.com consensus 218,000) from last week's revised level of 222,000 (from 221,000). Continuing jobless claims for the week ending March 30 increased by 28,000 to 1.817 million from last week's revised level of 1.789 million (from 1.791 million).
  • The key takeaway from the report is that claims remain in a sideways range near the 210,000 level, which is not reflective of any sudden weakening in the labor market.
• Yield Check:
  • 2-yr: -4 bps to 4.93%
  • 3-yr: -4 bps to 4.76%
  • 5-yr: -3 bps to 4.58%
  • 10-yr: -3 bps to 4.53%
  • 30-yr: UNCH at 4.63%