Bond Market Update

Data Recon

• Factory orders declined 1.3% month-over-month in July (Briefing.com consensus: -1.4%) following a 4.8% decline in June. Excluding transportation, factory orders increased 0.6% month-over-month following a 0.4% increase in June. Shipments of manufactured goods jumped 0.9% on the heels of a 0.6% increase in June.
  • The key takeaway from the report is that the weakness in factory orders in July was concentrated in the transportation space, so the weakness was not as acute as the headline might suggest. New orders for primary metals (+1.6%), machinery (+1.9%), computers and electronic products (+1.2%), and electrical equipment, appliances, and components (+1.9%) were all up in a good sign for factory order activity.
• Yield Check:
  • 2-yr: -5 bps to 3.61%
  • 3-yr: -5 bps to 3.58%
  • 5-yr: -5 bps to 3.69%
  • 10-yr: -5 bps to 4.22%
  • 30-yr: -6 bps to 4.91%