Bond Market Update

Data Recon

• Total housing starts increased 7.2% month-over-month in January to a seasonally adjusted annual rate of 1.487 million units (Briefing.com consensus 1.340 million), with single-unit starts down 2.8%. Building permits decreased 5.4% to a seasonally adjusted annual rate of 1.376 million (Briefing.com consensus 1.392 million), with single-unit permits down 0.9%.
  • The key takeaway from the report is that it beat expectations thanks to strong growth in multi-unit starts while single-unit housing starts were down 2.8% month-over-month.
• Initial jobless claims for the week ending March 7 decreased by 1,000 to 213,000 (Briefing.com consensus 215,000). Continuing jobless claims for the week ending February 28 decreased by 21,000 to 1.850 million.
  • The key takeaway from the report is that claims remain just above the 200,000 mark, reflecting a low-firing environment.
• The trade deficit narrowed to $54.5 billion in January (Briefing.com consensus -$67.9 billion) from a revised $72.9 billion deficit (from -$70.3 billion) in December. The narrower gap was the result of exports being $15.8 billion more than December exports and imports being $2.6 billion less than December imports.
  • The key takeaway from the report is that the monthly trade deficit returned to the $50 billion range, which has been a familiar zone since last year's implementation of tariffs.
• Yield Check:
  • 2-yr: +2 bps to 3.65%
  • 3-yr: +2 bps to 3.67%
  • 5-yr: +2 bps to 3.80%
  • 10-yr: +1 bp to 4.22%
  • 30-yr: +2 bps to 4.87%