Bond Markets Improve After ISM and Construction Spending Data
- ISM Manufacturing PMI 54.9 in April vs 54.3 forecast
- New Orders 55.1 vs 55.1 previously
- Employment Index 54.7 vs 52.8 forecast
This data could be argued either way. On the one hand, we have stronger-than-expected employment a day ahead of NFP, but the stagnation in new orders is--well... stagnant.
The other data out at 10am, Construction Spending, was less equivocal.
- March Construction Spending +0.2 vs +0.5 forecast
- February revised to -0.2 from 0.1
Construction spending isn't typically a big market mover and especially not compared to ISM, but in today's case, it could be playing sort of a "tie-breaking vote" role. The other, probably better consideration is that ISM was something worth waiting for earlier this morning when Jobless Claims came out much weaker than expected.
In other words, market participants were certainly waiting on ISM to some extent, in order to round out the morning of economic data. All the votes are in now, and the the bias is economically weaker, thus stronger for bond markets.
Fannie 4.0s are up 5 ticks at the moment, to 104-29. 10yr yields are down 2.4bps at 2.624.