Bond Market Update

Data Recon

• Factory orders declined 3.7% month-over-month in April (Briefing.com consensus -3.1%) following a downwardly revised 3.4% increase (from 4.3%) in March. Excluding transportation, factory orders declined 0.5% for the second straight month. Shipments of manufactured goods dropped 0.3% on the heels of a 0.2% decline in March.
  • The key takeaway from the report is that April activity was devoid of strength, with declines in durable goods orders, nondurable goods orders, and business spending.
    • Durable goods orders were down 6.3% after increasing 7.6% in March, led by a 17.1% decline in transportation equipment orders.
    • New orders for nondurable goods fell 0.9% after declining 0.7% in March.
    • New orders for nondefense capital goods excluding aircraft—a proxy for business spending— decreased 1.5% after increasing 0.3% in March.
    • The inventory-to-shipments ratio increased to 1.58 from 1.57 in March.
• The April JOLTS - Job Openings Report showed there were 7.391 mln job openings versus an upwardly revised 7.200 mln (from 7.192 mln) in March.
• Yield check:
  • 2-yr: +1 bp to 3.95%
  • 3-yr: unch at 3.91%
  • 5-yr: -2 bps to 4.00%
  • 10-yr: -3 bps to 4.43%
  • 30-yr: -5 bps to 4.95%