Daily Market Color May 15, 2023Manufacturing Miss as the U.S. Refills the (Strategic) Tank Rates rise despite significant manufacturing miss. Swap rates and Treasury yields rose slightly on the day after starting the session lower amid an Empire Manufacturing miss. The NY state manufacturing index fell to -31.8 in May, the largest month-over-month decrease since April of 2020 and far lower than the -3.9 forecast. Rates plummeted to their intraday lows after the data, but sold-off throughout the afternoon, the 2-year yield ending the session ~2bps higher at 4.01%. The 10-year yield climbed ~4bps to 3.50%. U.S. solicits bids for 3 million barrels of oil. Last year, the U.S. released over 200 million barrels of oil from the Strategic Petroleum Reserve (SPR) to lower energy costs, bringing current reserve levels to roughly 60% of its pre-2022 levels and roughly half of its total capacity. Today, the government announced a solicitation of up to 3 million barrels of sour crude, which marks the Biden administration’s second attempt to replenish the SPR. This comes amidst OPEC+ production cuts which have driven up demand for the types of oil the SPR would like to purchase, and the combined impact could send gasoline prices higher during the summer months, a period of increased driving. US oil futures prices increased 0.5% on the announcement. Day ahead. Retail sales (8:30 AM) will lead a busy schedule ahead of industrial production figures (9:15 AM). Fed members Mester, Bostic, Williams, and Logan will make comments throughout the day.