Bond Market Update

Data Recon

• The Treasury Budget for August showed a deficit of $380.1 billion compared to a surplus of $89.3 billion in the same period a year ago. August has been a deficit month 69 times out of 70 fiscal yeas because there are no major tax due dates this month. The August deficit resulted from outlays ($687 billion) exceeding receipts ($307 billion). The Treasury Budget data is not seasonally adjusted so the August deficit cannot be compared to the July deficit.
  • The key takeaway from the report is that the U.S. government continues to run large budget deficits, which necessitates a large amount of Treasury issuance for government funding.
• Yield Check:
  • 2-yr: +2 bps to 3.67%
  • 3-yr: +2 bps to 3.49%
  • 5-yr: +3 bps to 3.48%
  • 10-yr: +3 bps to 3.69%
  • 30-yr: +4 bps to 4.00%