Bond Market Update

Data Recon

• Longer-dated Treasuries are hanging onto their starting gains while the front end underperforms but also trades modestly higher after overcoming some overnight pressure.
• Total housing starts were down 5.2% month-over-month in September to a seasonally adjusted annual rate of 1.221 million (Briefing.com consensus: 1.305 million) following an upwardly revised 1.288 million (from 1.275 million) in August. Building permits were down 0.2% month-over-month to a seasonally adjusted annual rate of 1.400 million (Briefing.com consensus: 1.390 million).
  • The key takeaway from the report is that there was no growth in permits for single-unit dwellings in any region. Building permits are a leading indicator, and the lack of growth is a reflection of the constraints builders and homebuyers alike face from higher financing costs.
• Yield Check:
  • 2-yr: -1 bp to 4.75%
  • 3-yr: -1 bp to 4.84%
  • 5-yr: -2 bps to 4.91%
  • 10-yr: -4 bps to 5.10%
  • 30-yr: -5 bps to 5.42%