Bond Market Update

Data Recon

• The ISM Manufacturing Index checked in at 52.7% for March (Briefing.com consensus: 52.3%), up from 52.4% in February. The dividing line between expansion and contraction is 50.0%, so the March figure suggests there was a slight acceleration in manufacturing activity versus the prior month.
  • The key takeaway from the report is that it conveys an ongoing expansion in manufacturing activity coupled with an ongoing increase in prices for raw materials that works against the notion of the Fed cutting rates soon.
• Yield Check:
  • 2-yr: +1 bp to 3.81%
  • 3-yr: +1 bp to 3.83%
  • 5-yr: +1 bp to 3.96%
  • 10-yr: +1 bp to 4.32%
  • 30-yr: +2 bps to 4.91%