Bond Market Update

Data Recon

• Housing starts declined 12.4% month-over-month in July to a seasonally adjusted annual rate of 1.239 million (Briefing.com consensus: 1.360 million). Single-unit starts were down in every region of the country. Building permits increased 5.0% month-over-month to a seasonally adjusted annual rate of 1.443 million (Briefing.com consensus: 1.390 million). The good news there is that permits for single units—a leading indicator—were up 2.5% month-over-month.
  • The key takeaway from the report, though, is the broad-based weakness in single-unit starts seen in July, which is a month that featured rising interest rates that increased the cost of financing.
• Yield Check:
  • 2-yr: +2 bps to 4.20%
  • 3-yr: +1 bp to 4.27%
  • 5-yr: +2 bps to 4.39%
  • 10-yr: +1 bp to 4.74%
  • 30-yr: +1 bp to 5.32%