Bond Markets Weaker After Durable Goods Data
The Durable Goods headline was much stronger than expected, though that strength was mostly isolated in the defense sector. Here's the rundown:
- April Durable Goods +0.8 vs -0.5 forecast
- March revised to +3.6 from +2.5 previously
- Excluding Transportation +0.1 vs +0.0 forecast
- Excluding Defense -0.8
- Excluding Aircraft -1.2
In other words, without the contribution from spending on capital goods and aircraft in the Defense sector, total orders would have been in negative territory, as expected.
Despite the caveats, bond markets moved into weaker territory on the data after making it through the overnight session relatively unscathed. 10yr yields are up 1.4 bps at 2.548 and Fannie 3.5s are down 3 ticks at 102-14.
Home price data is coming at at 9am, but Consumer Confidence at 10am is the bigger potential market mover.