Bond Market Update

Data Recon

• The trade deficit narrowed to $55.9 billion in April (Briefing.com consensus: -$55.5 billion) from an upwardly revised $56.6 billion (from -$60.3 billion) in March. The narrowing was a function of exports being $8.3 billion more than March exports and imports being $7.6 billion more than March imports.
  • The key takeaway from the report is that the export strength was concentrated in crude oil exports (+$6.4 billion), fuel oil exports (+$1.3 billion), and other petroleum products (+$1.0 billion), which were boosted by the supply disruptions tied to the difficulties traversing the Strait of Hormuz.
• Yield Check:
  • 2-yr: -3 bps to 4.13%
  • 3-yr: -2 bps to 4.19%
  • 5-yr: -2 bps to 4.26%
  • 10-yr: -2 bps to 4.54%
  • 30-yr: -1 bp to 5.01%