Bond Market Update

Data Recon

• Initial jobless claims for the week ending August 24 decreased by 2,000 to 231,000 while continuing jobless claims for the week ending August 17 increased by 13,000 to 1.868 million.
  • The key takeaway from the report is the steady standing of initial jobless claims, which remain well below levels typically associated with an economy in recession.
• The second estimate for Q2 GDP was revised up to 3.0% from the preliminary estimate of 2.8% on the back of an upward revision to consumer spending. The GDP Deflator was revised up to 2.5% from 2.3%.
  • The key takeaway from the report is that consumer spending was solid in the second quarter, exceeding the prior eight quarter average of 2.2%.
• The Advance Intl. Trade in Goods deficit widened to $102.7 billion in July from an upwardly revised $96.6 billion (from -$96.8 billion) in June, with exports roughly flat and imports $6.1 billion more than June imports.
  • The key takeaway from the report is that the uptick in imports was led by industrial supplies and capital goods, which is what one would expect in a growing economy.
• Yield Check:
  • 2-yr: +2 bps to 3.89%
  • 3-yr: +3 bps to 3.76%
  • 5-yr: +1 bp to 3.67%
  • 10-yr: +3 bps to 3.87%
  • 30-yr: +3 bps to 4.16%