Bond Market Update

Data Recon

• The April ISM Manufacturing Index slipped to 48.7% in April (Briefing.com consensus 47.9%) from 49.0% in March. The dividing line between expansion and contraction is 50.0%, so the April reading suggests that activity in the manufacturing sector contracted at a slightly faster pace than the prior month.
  • The key takeaway from the report is that demand weakened, evidenced by the New Orders Index remaining below 50.0% for the third straight month, with tariff uncertainty contributing to the relatively weak activity.
• Total construction spending decreased 0.5% month-over-month in March (Briefing.com consensus 0.3%) after increasing a downwardly revised 0.6% increase (from 0.7%) in February. Total private construction was down 0.6% month-over-month, while total public construction was down 0.2% month-over-month. On a year-over-year basis, total construction spending was up 2.8%.
  • The key takeaway from the report is that spending weakened in March for both private and public construction.
• Yield Check:
  • 2-yr: -1 bp to 3.61%
  • 3-yr: -2 bps to 3.59%
  • 5-yr: -2 bps ot 3.74%
  • 10-yr: +1 bp to 4.19%
  • 30-yr: +4 bps to 4.72%