Bond Market Update

Data Recon

• The ADP Employment Change Report for January showed an 183,000 increase in private-sector jobs (Briefing.com consensus 155,000) following an upwardly revised 176,000 (from 122,000) in December.
  • The key takeaway from the report is that the entirety of the increase was in the service-providing sector (190,000). There were 6,000 fewer jobs in the goods-producing sector.
• The December Trade Balance Report showed a widening in the deficit to $98.4 billion (Briefing.com consensus -$98.0 billion) from a downwardly revised $78.9 billion (from -$78.2 billion) in November. December exports were $7.1 billion less than November exports while December imports were $12.4 billion more than November imports.
  • The key takeaway from the report is that the big jump in imports was presumably a function of trying to get ahead of possible tariff actions.
• Yield Check:
  • 2-yr: -1 bp to 4.21%
  • 3-yr: -2 bps to 4.23%
  • 5-yr: -3 bps to 4.29%
  • 10-yr: -4 bps to 4.47%
  • 30-yr: -5 bps to 4.70%