Bond Market Update

Data Recon

• Total industrial production increased 0.6% month-over-month in June (Briefing.com consensus 0.3%) following an upwardly revised 0.9% increase (from 0.7%) in May. The capacity utilization rate jumped to 78.8% (Briefing.com consensus 78.6%) from an upwardly revised 78.3% (from 78.2%) in May. Total industrial production was up 1.6% yr/yr while the capacity utilization rate was 0.9 percentage point below its long-run average.
  • The key takeaway from the report was the continued increase in manufacturing output, which fits with an economy that isn't pacing for a hard landing.
• Yield Check:
  • 2-yr: +2 bps to 4.46%
  • 3-yr: +1 bp to 4.22%
  • 5-yr: +1 bp to 4.10%
  • 10-yr: +1 bp to 4.18%
  • 30-yr: +1 bp to 4.39%