Bond Market Update

Data Recon

• The Treasury's budget deficit was $94.6 billion in January (Briefing.com consensus: -$190.0B), which was much narrower than expected and a notable improvement from the same period a year ago when it was $128.6 billion. Receipts totaled $559.9 billion, while outlays summed to $654.6 billion.
  • The key takeaway from the report is that it shows the benefits of collecting customs duties as a means of reducing the deficit. At the same time, it also reflects the onerous interest costs stemming from the high amount of debt issuance needed to fund government operations.
• Yield Check:
  • 2-yr: +6 bps to 3.51%
  • 3-yr: +5 bps to 3.57%
  • 5-yr: +5 bps to 3.75%
  • 10-yr: +3 bps to 4.18%
  • 30-yr: +3 bps to 4.82%