Bond Market Update

Data Recon

• Total PPI was up 0.4% month-over-month in August (Briefing.com consensus 0.4%) after a revised 0.1% increase (from 0.0%) in July. Core PPI, which excludes food and energy, was up 0.2% month-over-month (Briefing.com consensus 0.3%) after increasing a revised 0.3% (from 0.2%) in July. Total PPI was up 5.4% year-over-year, up from 4.8% in July. Core PPI was up 4.6% year-over-year versus 4.3% in July.
  • The key takeaway from the report is that while the slightly cooler-than-expected core PPI was a positive sight, it was essentially masked by the upward revisions to readings for July, so this report reinforces the market's expectations for a rate hike as early as next week.
• Initial jobless claims for the week ending September 5 decreased by 1,000 to 206,000 (Briefing.com consensus 208,000) from last week's revised total of 207,000 (from 206,000). Continuing jobless claims for the week ending August 29 also decreased by 1,000 to 1.774 million from last week's revised total of 1.775 million (from 1.779 million).
  • The key takeaway from the report is that initial claims remain locked in a narrow range right on their four-week moving average, signaling little overall change in layoff activity.
• Yield Check:
  • 2-yr: +8 bps to 4.51%
  • 3-yr: +9 bps to 4.61%
  • 5-yr: +9 bps to 4.70%
  • 10-yr: +8 bps to 4.92%
  • 30-yr: +6 bps to 5.35%