Bond Market Update

Data Recon

• Retail sales increased 0.2% month-over-month in February (Briefing.com consensus 0.7%) following a downwardly revised 1.2% decline (from -0.9%) in January. Excluding autos, retail sales were up 0.3% month-over-month (Briefing.com consensus 0.4%) following a 0.6% decline (from -0.4%) in January.
  • The key takeaway from the report is that control group retail sales, which exclude auto, gasoline station, building materials, and food services sales, jumped 1.0% month-over-month following a downwardly revised 1.0% decline (from -0.8%) in January.
• The New York Fed Empire State Manufacturing Survey contained some unnerving inflation news juxtaposed with a disappointing reading on business activity. Specifically, the General Business Conditions Index declined to -20.0 in March from 5.7 in February. A number below 0.0 denotes a contraction in business activity in the New York Fed region. The prices paid index rose five points to 44.9, its highest level in more than two years, while the prices received index jumped three points to 22.4, hitting its highest level since May 2023.
  • The key takeaway from the report is that it plays into some of the stagflation worries that have infiltrated the market.
• Yield Check:
  • 2-yr: +3 bps to 4.05%
  • 3-yr: +3 bps to 4.03%
  • 5-yr: +3 bps to 4.11%
  • 10-yr: +1 bp to 4.32%
  • 30-yr: UNCH at 4.62%