Bond Market Update

Data Recon

• Total housing starts increased 11.2% month-over-month in February to a seasonally adjusted annual rate of 1.501 million (Briefing.com consensus 1.385 million), with single-unit starts up 11.4%. Building permits were down 1.2% month-over-month to a seasonally adjusted annual rate of 1.456 million. Single-unit permits were down 0.2%.
  • The key takeaway from the report is that starts activity was bolstered by the return of better weather, which was reflected in the 18.3% increase in housing starts in the South region (they were down 23.0% in January).
• February import prices were up 0.4% month-over-month following an upwardly revised 0.4% increase (from 0.3% in January). Excluding fuel, import prices increased 0.3% on the heels of a 0.1% increase in January. Export prices were up 0.1% month-over-month after a 1.3% increase in January. Excluding agricultural products, export prices also rose 0.1% month-over-month following a 1.5% jump in January.
  • The key takeaway from the report is the inflationary shift in the year-over-year readings. Nonfuel import prices were up 2.0% versus down 0.6% for the 12 months ending in February 2024. Non-agricultural export prices increased 2.2% year-over-year versus being down 1.2% for the 12 months ending in February 2024.
• Yield Check:
  • 2-yr: +1 bp to 4.06%
  • 3-yr: +1 bp to 4.04%
  • 5-yr: +1 bp to 4.11%
  • 10-yr: +2 bps to 4.33%
  • 30-yr: +3 bps to 4.63%