Bond Market Update

Data Recon

• Industrial production increased 0.2% month-over-month in July (Briefing.com consensus: 0.3%) following an upwardly revised 0.3% increase (from 0.1%) in June. The capacity utilization rate was 76.3% (Briefing.com consensus: 76.3%) versus an upwardly revised 76.2% (from 76.1%) in June. Total industrial production was up 1.1% year-over-year. The capacity utilization rate was 3.1 percentage points below its long-run average.
  • The key takeaway from the report is that gains were registered by all three major industry groups, led by a 0.5% increase in utilities that stemmed from hot weather increasing air-conditioning use.
• Yield Check:
  • 2-yr: +2 bps to 4.20%
  • 3-yr: +2 bps to 4.28%
  • 5-yr: +2 bps to 4.40%
  • 10-yr: +2 bps to 4.74%
  • 30-yr: +1 bp to 5.32%