Bond Market Update

Data Recon

• According to ADP, private sector employment increased by 62,000 jobs in March (Briefing.com consensus: 42,000) following an upwardly revised 66,000 (from 63,000) in February. That was split fairly evenly between the goods-producing and service-providing sectors; however, it was driven entirely by small businesses, which added 85,000 jobs.
• Total retail sales jumped 0.6% month-over-month in February (Briefing.com consensus: 0.5%) following an upwardly revised 0.1% decline (from -0.2%) in January. Excluding autos, retail sales rose 0.5% (Briefing.com consensus: 0.3%) after being unchanged in January.
  • The key takeaway from the report is that it revealed solid spending activity across most kinds of retail businesses. The strength of the report is apt to be diluted, however, by the recognition that it preceded the hefty increase in gasoline prices and the sharp decline in stock prices in March that are expected to keep discretionary spending in check.
• Yield Check:
  • 2-yr: UNCH at 3.80%
  • 3-yr: +1 bp to 3.83%
  • 5-yr: +1 bp to 3.96%
  • 10-yr: +2 bps to 4.33%
  • 30-yr: +3 bps to 4.92%