Bond Market Update

Data Recon

• Industrial production increased 0.4% month-over-month in December (Briefing.com consensus 0.2%) following an upwardly revised 0.4% increase (from 0.2%) in November. The capacity utilization rate was 76.3% (Briefing.com consensus 76.0%) versus an upwardly revised 76.1% (from 76.0%) in November. Total industrial production increased 2.0% yr/yr, while the capacity utilization rate was 3.2 percentage points below its long-run average.
  • The key takeaway from the report is that manufacturing output was even better than the headline suggests given the nice upward revision for November. This is consistent with an economy that closed 2025 on a good note, notwithstanding the government shutdown in October.
• Yield Check:
  • 2-yr: +1 bp to 3.57%
  • 3-yr: +1 bp to 3.63%
  • 5-yr: +2 bps to 3.78%
  • 10-yr: +2 bps to 4.18%
  • 30-yr: +2 bps to 4.81%