Bond Market Update

Data Recon

• Total industrial production decreased 0.3% month-over-month in March (Briefing.com consensus -0.3%) following an upwardly revised 0.8% increase (from 0.7%) in February. The capacity utilization rate fell to 77.8% (Briefing.com consensus 77.9%) from 78.2% in February. Total industrial production increased 1.3% yr/yr while the capacity utilization rate was 1.8 percentage points below its long-run average.
  • The key takeaway from the report is that the large decline in the output of utilities overshadowed the increase in manufacturing output and mining output, so the headline decline isn't as bad as it looks at first blush.
• Yield Check:
  • 2-yr: -3 bps to 3.80%
  • 3-yr: -3 bps to 3.81%
  • 5-yr; -1 bp to 3.96%
  • 10-yr: +1 bp to 4.33%
  • 30-yr: +1 bp to 4.79%