Bond Market Update

Data Recon

• The Q2 Employment Cost Index increased 0.9% (Briefing.com consensus: 0.8%) on the heels of a 0.9% increase in Q1, with wages and salaries up 0.9% and benefit costs up 1.0%.
  • The key takeaway from the report is that wages and salaries for civilian workers, up 3.2% year-over-year, are not keeping up with inflation. That could eventually lead to reduced discretionary spending activity.
• Yield Check:
  • 2-yr: +5 bps to 4.28%
  • 3-yr: +6 bps to 4.34%
  • 5-yr: +4 bps to 4.42%
  • 10-yr: +4 bps to 4.70%
  • 30-yr: +2 bps to 5.23%