Bond Market Update

Data Recon

• The Q2 Current Account Deficit was -$266.8 billion versus a downwardly revised -$241.0 billion (from (-$236.7 billion) for Q1.
• The Philadelphia Fed Index for September was a bit weaker than expected at 1.7 (Briefing.com consensus 3.0), but that was fine because it was up nicely from the -7.0 reading for August and also signified an expansion in manufacturing activity, clearing the expansion/contraction demarcation line of 0.0.
• Initial jobless claims for the week ending September 14 decreased by 12,000 to 219,000 (Briefing.com consensus 232,000). Continuing jobless claims for the week ending September 7 decreased by 14,000 to 1.829 million.
  • The key takeaway from the report is that there is nothing in the low initial claims reading that, as Fed Chair Powell might agree, suggests the likelihood of a recession, or downturn in the economy, is elevated.
• Yield check:
  • 2-yr: +2 bps to 3.62%
  • 3-yr: +3 bps to 3.50%
  • 5-yr: +5 bps to 3.52%
  • 10-yr: +6 bps to 3.75%
  • 30-yr: +6 bps to 4.07%