Bond Market Update

Data Recon

• Initial jobless claims for the week ending June 22 decreased by 6,000 to 233,000 (Briefing.com consensus 238,000). Continuing jobless claims for the week ending June 15 increased by 18,000 to 1.839 million -- the highest level since November 27, 2021.
  • The key takeaway from the report is the elevated level of continuing jobless claims, which suggests laid-off workers are facing longer wait times before finding a new job, which would be a symptom of a softening labor market.
• With the third estimate, Q1 GDP was revised up to 1.4% (Briefing.com consensus 1.3%) from 1.3%, although personal spending growth was revised down to 1.5% from 2.0%. The GDP Price Deflator was revised up to 3.1% (Briefing.com consensus 3.1) from 3.0%.
  • The key takeaway from the report is that it is dated (we're just days away from the end of Q2) so its impact should be limited; however, the slowdown in personal spending is noteworthy in light of more anecdotal evidence in the interim that suggests consumers, in aggregate, are reining in their discretionary spending.
• Durable goods orders for May increased 0.1% month-over-month (Briefing.com consensus -1.2%) following a downwardly revised 0.2% increase (from 0.7%) in April. Excluding transportation, durable goods orders were down 0.1% month-over-month (Briefing.com consensus 0.2%) following an unrevised 0.4% increase in April.
  • The key takeaway from the report is that new orders for nondefense capital goods excluding aircraft -- a proxy for business spending -- declined 0.6% month-over-month.
• The Advance International Trade in Goods deficit widened to $100.6 billion in May from $98.0 billion in April. Advance Retail Inventories increased 0.7% while Advance Wholesale Inventories increased 0.6%.
• Yield Check:
  • 2-yr: -2 bps to 4.73%
  • 3-yr: -2 bps to 4.51%
  • 5-yr: +1 bp to 4.35%
  • 10-yr: -2 bps to 4.30%
  • 30-yr: -2 bps to 4.43%