Bond Market Update

Data Recon

• The Producer Price Index for final demand decreased 0.4% month-over-month in March (Briefing.com consensus 0.1%) following an upwardly revised 0.1% increase (from 0.0%) in February. The Core Producer Price Index for final demand, which excludes food and energy, decreased 0.1% month-over-month (Briefing.com consensus 0.3%) following an upwardly revised 0.1% increase (from -0.1%) in February. On a year-over-year basis, the index for final demand was up 2.7% versus 3.2% in February, and the index for final demand, less food and energy, was up 3.3% versus 3.5% in February.
  • The key takeaway from the report is that inflation for wholesalers was suppressed in March; however, that good news is being discounted (like yesterday's CPI report was) as temporary given that tariff actions are taking root in supply chains and are expected to lead to higher prices at least in the short term.
• Yield Check:
  • 2-yr: +1 bp to 3.86%
  • 3-yr: +3 bps to 3.91%
  • 5-yr: +5 bps to 4.09%
  • 10-yr: +8 bps to 4.47%
  • 30-yr: +7 bps to 4.92%