Bond Market Update

Data Recon

• Factory orders slumped 4.8% month-over-month in June (Briefing.com consensus: -5.1%) following an upwardly revised 8.3% increase (from 8.2%) in May. Excluding transportation, factory orders increased 0.4% month-over-month following a 0.3% increase in May. Shipments of manufactured goods jumped 0.5% on the heels of a 0.2% increase in May.
  • The key takeaway from the report is that the weakness in factory orders in June was largely concentrated in transportation equipment orders, so the headline isn't as bad as it appears at first blush; however, some extra attention will be paid next month to new orders for nondefense capital goods excluding aircraft—a proxy for business spending—to see if the weakness in June (-0.8%), which followed a 1.9% increase in May, persists.
• Yield Check:
  • 2-yr: +1 bp to 3.71%
  • 3-yr: +1 bp to 3.68%
  • 5-yr: UNCH at 3.77%
  • 10-yr: +1 bp to 4.23%
  • 30-yr: +1 bp to 4.82%