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Yields Catching Down With Weak ISM

US TSYS

A big gap between ISM movements and Treasury yields is swiftly being closed, with the latter realigning with the ISM rather than the other way around.

  • Yields had been rising swiftly since late 2021, but are coming down sharply alongside recessionary-looking high frequency data. The chart below is updated with today's ISM data.
  • 10Y yields are now off 20bp on the session, and almost 68bp below the mid-June high at 2.82%.
  • There may yet be further downside for yields in the months to come given weakening economic momentum.

Source: BBG, MNI

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