Bond Market Update

Data Recon

• Total industrial production increased 0.7% month-over-month in January (Briefing.com consensus 0.2%) following a downwardly revised 0.3% increase (from 0.5%) in January. The capacity utilization rate jumped to 78.2% (Briefing.com consensus 77.7%) from a downwardly revised 77.7% (from 77.8%) in January. Total industrial production increased 1.4% yr/yr while the capacity utilization rate was 1.4 percentage points below its long-run average.
  • The key takeaway from the report is that there was a solid increase in manufacturing output that was led by an 8.5% jump in the index for motor vehicles and parts, which likely had some tariff frontrunning involved. Motor vehicle assemblies increased 11.5% month-over-month to a seasonally adjusted annual rate of 10.35 million.
• 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%