Bond Market Update

Data Recon

• Industrial production decreased 0.1% month-over-month in July (Briefing.com consensus -0.1%) following an upwardly revised 0.4% increase (from 0.3%) in June. The capacity utilization rate was 77.5% (Briefing.com consensus 77.5%), versus an upwardly revised 77.7% (from 77.6%) in June. Total industrial production increased 1.4% yr/yr, while the capacity utilization rate was 2.1 percentage points below its long-run average.
  • The key takeaway from the report is that industrial production activity was muted in July, with manufacturing output stalling due to output declining in all nondurable categories.
• Yield Check:
  • 2-yr: -1 bp to 3.73%
  • 3-yr: -1 bp to 3.69%
  • 5-yr: UNCH at 3.82%
  • 10-yr: +1 bp to 4.30%
  • 30-yr: +2 bps to 4.91%