Bond Market Update

Data Recon

• The ISM Manufacturing Index checked in at 47.9% for December (Briefing.com consensus: 48.4%), down from 48.2% in November. The dividing line between expansion and contraction is 50.0%, so the December figure, which is the tenth straight month below 50.0%, suggests manufacturing activity contracted at a faster pace than the prior month.
  • The key takeaway from the report is that the manufacturing sector operated in a state of contraction for the tenth consecutive month, with tariffs and weaker order activity cited as key drags on overall activity.
• Yield Check:
  • 2-yr: -2 bps to 3.46%
  • 3-yr: -2 bps to 3.53%
  • 5-yr: -2 bps to 3.72%
  • 10-yr: -2 bps to 4.17%
  • 30-yr: -1 bp to 4.86%