Bond Market Update

Data Recon

• For June, the trade deficit narrowed to $73.3 billion (Briefing.com consensus: -$73.0 billion) from $77.6 billion in May. Both exports and imports declined month-over-month, but the narrowing deficit was the result of imports (-$7.3 billion) declining more than exports (-$2.9 billion).
  • The key takeaway from the report is that, while the real goods deficit narrowed to $94.5 billion in June from $99.8 billion in May, the Q2 average is still 18% greater than the Q1 average, so it will be factored as a drag on Q2 GDP.
• Yield Check:
  • 2-yr: -4 bps to 4.21%
  • 3-yr: -4 bps to 4.27%
  • 5-yr: -4 bps to 4.36%
  • 10-yr: -3 bps to 4.66%
  • 30-yr: -1 bp to 5.22%