Bond Market Update

Data Recon

• Factory orders decreased 0.9% month-over-month in December (Briefing.com consensus -0.3%) following a downwardly revised 0.8% decline (from -0.4%) in November. Excluding transportation, factory orders rose 0.3% on the heels of a 0.2% increase in November. Shipments of manufactured goods jumped 0.6% in December following a 0.1% increase in November.
  • The key takeaway from the report is that the weakness in factory orders was concentrated in the durable goods space, and primarily in nondefense aircraft and parts; but business spending was up, evidenced by the growth in new orders for nondefense capital goods excluding aircraft.
• Yield Check:
  • 2-yr: -4 bps to 4.23%
  • 3-yr: -2 bps to 4.27%
  • 5-yr: -1 bp to 4.34%
  • 10-yr: UNCH at 4.55%
  • 30-yr: +2 bps to 4.79%