Bond Market Update

Data Recon

• The ISM Services PMI decreased to 52.8% in January (Briefing.com consensus 53.9%) from a downwardly revised 54.0% (from 54.1%) in December. The dividing line between expansion and contraction is 50.0%, so the January reading reflects services sector activity expanding but at a slower pace than the prior month. January marked the 53rd time in 56 months that the Services PMI indicated expansion.
  • The key takeaway from the report is that the pace of expansion in the nation's largest sector decelerated in January. That will likely temper growth forecasts for the first quarter.
• Yield Check:
  • 2-yr: -6 bps to 4.16%
  • 3-yr: -7 bps to 4.18%
  • 5-yr: -9 bps to 4.23%
  • 10-yr: -10 bps to 4.42%
  • 30-yr: -10 bps to 4.65%