Bond Market Update

Data Recon

• The March ISM Manufacturing Index hit 49.0% (Briefing.com consensus 49.8%) versus 50.3% in February. The dividing line between expansion and contraction is 50.0%, so the March reading suggests that activity in the manufacturing sector decreased compared to the prior month.
  • The key takeaway from the report is that it paints a poor picture for the second month in a row, as the headline index slipped into contraction while prices rose sharply for the second consecutive month.
• Total construction spending increased 0.7% month-over-month in February (Briefing.com consensus 0.4%) after decreasing a revised 0.5% (from -0.2%) in January. Total private construction was up 0.9% month-over-month while total public construction was up 0.2% month-over-month. On a year-over-year basis, total construction spending was up 2.9%.
  • The key takeaway from the report is that residential spending rebounded after a poor January, which is encouraging for longer term health of the housing market.
• Yield Check:
  • 2-yr: -5 bps to 3.86%
  • 3-yr: -7 bps to 3.84%
  • 5-yr: -9 bps to 3.89%
  • 10-yr: -11 bps to 4.14%
  • 30-yr: -11 bps to 4.51%