Bond Market Update

Data Recon

• Total housing starts declined 6.8% month-over-month to a seasonally adjusted annual rate of 1.238 million units (Briefing.com consensus 1.350 million), with single-unit starts down 14.1% to 851,000. Building permits were down 4.0% month-over-month to a seasonally adjusted annual rate of 1.396 million (Briefing.com consensus 1.440 million), with single-unit permits down 0.1%.
  • There is some chatter that Hurricane Beryl had some influence over the disappointing data, yet that isn't a totally adequate excuse given the decline in single-unit starts and permits in the West where Hurricane Beryl had zero impact. The key takeaway, then, is that conditions in the residential construction market remain soft with higher rates acting as a constraint.
• Yield check:
  • 2-yr: -6 bps to 4.04%
  • 3-yr: -6 bps to 3.85%
  • 5-yr: -5 bps to 3.75%
  • 10-yr: -5 bps to 3.88%
  • 30-yr: -3 bps to 4.15%