Bond Market Update

Data Recon

• The Department of Commerce released construction spending data for September and October as it continues to play catch-up from the government shutdown. For September, construction spending declined 0.6% month-over-month following an upwardly revised 0.4% increase (from 0.2%) in August. For October, construction spending jumped 0.5% month-over-month (Briefing.com consensus: 0.2%). Total private construction was up 0.6% month-over-month in October, while total public construction was up 0.1% month-over-month. On a year-over-year basis, total construction spending was down 1.0%.
  • The key takeaway from the report is that the rebound in October was driven by residential spending and specifically private residential improvements.
• Yield Check:
  • 2-yr: -1 bp to 3.59%
  • 3-yr: -1 bp to 3.67%
  • 5-yr: -1 bp to 3.85%
  • 10-yr: -1 bp to 4.29%
  • 30-yr: -1 bp to 4.91%