Bond Market Update

Data Recon

• Factory orders declined 1.3% month-over-month in May (Briefing.com consensus: 1.5%) following an upwardly revised 5.3% increase (from 4.8%) in April. Excluding transportation, factory orders increased 1.9% on the heels of a 1.7% increase in April. Shipments of manufactured goods jumped 1.6% after increasing 1.3% in April.
  • The key takeaway from the report is that the headline weakness was a function of a large decline in volatile transportation equipment orders. Exclude that factor, and factory orders were quite solid in May.
• Yield Check:
  • 2-yr: -3 bps to 4.13%
  • 3-yr: -2 bps to 4.16%
  • 5-yr: -1 bp to 4.22%
  • 10-yr: UNCH at 4.48%
  • 30-yr: +1 bp to 4.98%