Bond Market Update

Data Recon

• Initial jobless claims for the week ending July 13 increased by 20,000 to 243,000 (Briefing.com consensus 225,000). Continuing jobless claims for the week ending July 6 also increased by 20,000 to 1.867 million, which is the highest level since November 27, 2021.
  • The key takeaway from the report is that it fits with the view that there is some softening in the labor market, which is a trend that will massage the market's belief that the Fed is likely to cut the target range for the fed funds rate before the end of the year.
• The Philadelphia Fed Index for July jumped to 13.9 (Briefing.com consensus 2.9) from 1.3 in June as the indexes for shipments, new orders, and employment turned positive. A number above 0.0 for this series denotes an expansion in manufacturing activity in the Philadelphia Fed region.
  • The fact that this is survey data, though, as opposed to the hard data of jobless claims, diminishes its influence as a more convincing economic guidepost. The Fed, frankly, will be more interested in what it is seeing in the jobless claims data.
• Yield Check:
  • 2-yr: +2 bps to 4.45%
  • 3-yr: +1 bp to 4.21%
  • 5-yr: +3 bps to 4.10%
  • 10-yr: +3 bps to 4.18%
  • 30-yr: +4 bps to 4.40%