Bond Market Update

Data Recon

• Total housing starts increased 15.8% month-over-month in December to a seasonally adjusted annual rate of 1.499 million units (Briefing.com consensus 1.318 million). Total building permits were down 0.7% month-over-month to a seasonally adjusted annual rate of 1.483 million (Briefing.com consensus 1.454 million).
  • The key takeaway from the report is that there were gains in single-unit starts (+3.3%) and single-unit permits (+1.6%), which is encouraging for a housing market that needs new supply to compensate for the limited inventory in the existing home market.
• Yield Check:
  • 2-yr: UNCH at 4.24%
  • 3-yr: UNCH at 4.30%
  • 5-yr: -1 bp to 4.39%
  • 10-yr: -3 bps to 4.58%
  • 30-yr: -3 bps to 4.81%