Bond Market Update

Data Recon

• The November ADP Employment Change Report indicated private-sector employment shed 32,000 jobs (Briefing.com consensus: 20,000) following an upwardly revised 47,000 increase (from 42,000) in October, with both the goods-producing (-19,000) and service-providing (-13,000) sectors losing jobs.
  • The key takeaway from the report was the understanding that small establishments (-120,000) accounted for the entirety of the November decline, likely reflecting the headwinds many are facing from higher costs and more guarded spending by low- and middle-income consumers.
• The September Import-Export Price Index didn't dissuade from the rate-cut optimism either. Both import and export prices were unchanged month-over-month. Nonfuel import prices were up 0.2%, but notably were up just 0.8% year-over-year.
• Yield Check:
  • 2-yr: -3 bps to 3.49%
  • 3-yr: -3 bps to 3.50%
  • 5-yr: -3 bps to 3.63%
  • 10-yr: -3 bps to 4.06%
  • 30-yr: -1 bp to 4.73%