Bond Market Update

Data Recon

• The ISM Services PMI increased to 52.4% in October (Briefing.com consensus 50.9%) from 50.0% in September. The dividing line between expansion and contraction is 50.0%, so the October reading reflects services sector activity accelerating from the prior month.
  • The key takeaway from the report is that it is not a data point that falls in favor of a rate cut in December. Business activity for the nation's largest sector accelerated in October, while the prices index (which measures prices paid for materials and services by services organizations) hit its highest level in three years.
• Yield Check:
  • 2-yr: +3 bps to 3.61%
  • 3-yr: +3 bps to 3.62%
  • 5-yr: +4 bps to 3.74%
  • 10-yr: +5 bps to 4.14%
  • 30-yr: +5 bps to 4.72%