Bond Market Update

Data Recon

• The July Trade Balance Report showed a widening in the deficit to $78.8 billion (Briefing.com consensus -$78.5 billion) from an upwardly revised $73.0 billion (from -$73.1 billion) in June. The widening was the result of imports being $7.1 billion more than June imports and exports being only $1.3 billion more than June exports.
  • The key takeaway from the report is the uptick in imports. While that will act as a drag on Q3 GDP forecasts, the increase in imports will nonetheless be construed as a reassuring demand signal for the U.S. economy.
• Yield Check:
  • 2-yr: -4 bps to 3.85%
  • 3-yr: -2 bps to 3.70%
  • 5-yr: -2 bps to 3.64%
  • 10-yr: UNCH at 3.84%
  • 30-yr: UNCH at 4.13%