Bond Market Update

Data Recon

• The ISM Services PMI edged up to 51.5% in August (Briefing.com consensus 51.0%) from 51.4% in July. The dividing line between expansion and contraction is 50.0%, so the August reading reflects services sector activity expanding at nearly the same pace as July.
  • The key takeaway from the report is that overall activity in the largest sector of the U.S. economy remains in an expansion mode, which is what the market, worried about a possible hard landing, wants to see. Slow to moderate growth, the report said, was noted across many industries.
• Yield Check:
  • 2-yr: -2 bps to 3.75%
  • 3-yr: -3 bps to 3.61%
  • 5-yr: -3 bps to 3.54%
  • 10-yr: -3 bps to 3.74%
  • 30-yr: -3 bps to 4.04%