Bond Market Update

Data Recon

• The preliminary reading for the University of Michigan Consumer Sentiment Index for April fell to 47.6 (Briefing.com consensus: 52.0) from the final reading of 53.3 for March. In the same period a year ago, the index stood at 52.2.
  • The key takeaway from the report is that the fallout from the Iran conflict was the driver of the big drop in sentiment and big rise in year-ahead inflation expectations in April (note: nearly all responses to the survey were captured before the two-week ceasefire agreement announced on April 7).
• Factory orders were flat month-over-month in February (Briefing.com consensus: 0.5%) following a downwardly revised unchanged reading (from 0.1%) in January. Excluding transportation, factory orders increased 1.2% after increasing 0.5% in January. Shipments of manufactured goods surged 1.4% after increasing 0.7% in January.
  • The key takeaway from the report is that factory orders weren't as flat as the headline suggests. On the contrary, they were quite strong when the volatile transportation component was excluded.
• Yield Check:
  • 2-yr: +1 bp to 3.79%
  • 3-yr: UNCH at 3.81%
  • 5-yr: +1 bp to 3.93%
  • 10-yr: +1 bp to 4.31%
  • 30-yr: +2 bps to 4.91%