Bond Market Update

 Data Recon

• Total industrial production increased 0.9% month-over-month in May (Briefing.com consensus 0.4%) after being flat in April. The capacity utilization rate jumped to 78.7% (Briefing.com consensus 78.5%) from a downwardly revised 78.2% (from 78.4%) in April. Total industrial production was up 0.4% yr/yr while the capacity utilization rate was 0.9 percentage point below its long-run average.
  • The key takeaway from the report was that gains were widespread across the major market groups, with particular strength in manufacturing output that should mitigate hard-landing concerns.
• Yield Check:
  • 2-yr: -4 bps to 4.72%
  • 3-yr: -5 bps to 4.45%
  • 5-yr: -4 bps to 4.26%
  • 10-yr: -4 bps to 4.24%
  • 30-yr: -2 bps to 4.39%