Bond Market Update

Data Recon

• November NY Empire State Manufacturing Index (Actual 18.7; Briefing.com consensus: 6.1; Prior 10.7)
• Total construction spending increased 0.2% month-over-month in August (Briefing.com consensus: 0.1%) following an upwardly revised 0.2% increase (from -0.1%) in July. Total private construction was up 0.3% month-over-month, while total public construction was flat month-over-month. On a year-over-year basis, total construction spending was down 1.6%.
  • The key takeaway from the report is that the increase in spending came solely from the residential side; unfortunately, that did not include new single-family construction activity. The strength was concentrated in new multifamily construction.
• Fed Vice Chair Jefferson says in a speech that policy is somewhat restrictive but closer to neutral. Notes the balance of risks has shifted with increased downside risk to employment and that inflation, ex-tariffs, is making progress toward the Fed's 2.0% goal.
• Yield check:
  • 2-yr: unch at 3.61%
  • 3-yr: -1 bp to 3.61%
  • 5-yr: -1 bp to 3.73%
  • 10-yr: -1 bp to 4.14%
  • 30-yr: -1 bp to 4.74%