Bond Market Update

Data Recon

• Total industrial production was flat month-over-month in April (Briefing.com consensus 0.3%) following an unrevised 0.3% decline in March. The capacity utilization rate dipped to 77.7% (Briefing.com consensus 77.9%) from an unrevised 77.8% in March. Total industrial production increased 1.5% yr/yr while the capacity utilization rate was 1.9 percentage points below its long-run average.
  • The key takeaway from the report is that manufacturing output was weak. Excluding motor vehicles and parts, manufacturing output still decreased 0.3%, presumably with the tariff uncertainty holding back total output.
• Yield Check:
  • 2-yr: -7 bps to 3.98%
  • 3-yr: -8 bps to 3.97%
  • 5-yr: -7 bps to 4.09%
  • 10-yr: -5 bps to 4.48%
  • 30-yr: -2 bps to 4.95%