Bond Market Update

Data Recon

• Industrial production was unchanged month-over-month in August (Briefing.com consensus: 0.3%) following an unrevised 0.2% increase in July. The capacity utilization rate was 76.3% (Briefing.com consensus: 76.4%) and unchanged from July. Total industrial production was up 1.4% 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 the softness stemmed from a decline in manufacturing output, yet that downturn could have been a simple case of attrition following increases in manufacturing output for seven consecutive months.
• Yield Check:
  • 2-yr: +4 bps to 4.73%
  • 3-yr: +5 bps to 4.81%
  • 5-yr: +5 bps to 4.85%
  • 10-yr: +4 bps to 4.99%
  • 30-yr: +2 bps to 5.32%