Bond Market Update

Data Recon

• The ISM Services PMI increased to 55.4% in August (Briefing.com consensus: 54.1%) from 54.1% in July. The dividing line between expansion and contraction is 50.0%, so the August reading reflects services sector activity growing at a faster pace than the prior month.
  • The key takeaway from the report is that it shows services organizations haven't seen any relief in the prices they are paying for materials and services. That invites the risk of pass-through to customers and sustained inflation issues.
• Yield Check:
  • 2-yr: -6 bps to 4.33%
  • 3-yr: -5 bps to 4.40%
  • 5-yr: -5 bps to 4.50%
  • 10-yr: -4 bps to 4.76%
  • 30-yr: -2 bps to 5.24%