Bond Market Update

Data Recon

• The ISM Manufacturing Index increased to 55.6% in July (Briefing.com consensus 54.0%) from 53.3% in June. The dividing line between expansion and contraction is 50.0%, so the July figure suggests manufacturing activity expanded in July from the prior month.
  • The key takeaway from the report is that manufacturing activity picked up steam in July, with the PMI logging its highest reading since May 2022.
• Construction spending decreased 0.1% month-over-month in June (Briefing.com consensus: 0.3%) following a downwardly revised unchanged reading (from 0.1%) for May. On a year-over-year basis, construction spending was down 3.2%.
  • The key takeaway from the report is that the softness was driven entirely by residential spending.
• Yield Check:
  • 2-yr: -4 bps to 4.25%
  • 3-yr: -5 bps to 4.31%
  • 5-yr: -6 bps to 4.40%
  • 10-yr: -6 bps to 4.68%
  • 30-yr: -5 bps to 5.22%