Bond Market Update

Data Recon

• The August nonfarm payrolls headlines were a bit deflating, coming in below expectations and accompanied by downward revisions to July and June that helped drive the 3-month average to a soft 116,000 from 141,000. On the other hand, there was still growth in nonfarm payrolls, the unemployment rate dipped to 4.2% (from 4.3%), and average hourly earnings increased a stronger than expected 0.4% month-over-month, which should be helpful for spending.
  • The key takeaway from the report is that it was not as good as hoped, but it also wasn't as bad as feared. It was a report, however, that meshes with the understanding that there is a slowdown in hiring activity that should translate into a slowdown for the economy.
• Yield Check:
  • 2-yr: -6 bps to 3.69%
  • 3-yr: -5 bps to 3.57%
  • 5-yr: -3 bps to 3.51%
  • 10-yr: -2 bps to 3.71%
  • 30-yr: -1 bp to 4.01%