Bond Market Commentary

Over in bond land, Treasury yields are mostly higher before the opening bell Tuesday with the Federal Open Market Committee’s (FOMC’s) two-day meeting commencing today. Investors await the releases for the first quarter’s employment cost index, April’s consumer confidence, and February’s house price index data. The yield on the 10-year note is rising two basis points (0.02%) to 4.63%, while the 30-year bond yield is also increasing two basis points (0.02%) to 4.75%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is unchanged at 4.98%.

Treasury yields were lower on Monday, as investors looked forward to key economic releases scheduled for this week. The yield on the 10-year note was down five basis points (0.05%) to 4.61%, while the 30-year bond yield also fell five basis points (0.05%) to 4.73%. The yield on the two-year note decreased one basis point (0.01%) to 4.98%.

On the data front today, February’s Federal Housing Finance Agency’s (FHFA) House Price Index is expected to increase 0.2% month-over-month (MoM), versus the prior month’s decrease of 0.1%. The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index is projected to increase 6.70% year-over-year and 0.10% MoM for February versus the prior month’s increases of 6.59% and 0.14%, respectively. The Conference Board Consumer Confidence Index is expected to register 104.0 in April, slightly down from the prior month’s 104.7. The Employment Cost Index is expected to increase 1.0% for the first quarter versus the prior quarter’s increase of 0.9%. The Market News International (MNI) Chicago Purchasing Managers’ Index (PMI) is expected to register 45.0 for April, higher than the prior month’s 41.4.

In the auction space, the U.S. Treasury is set to issue $65 billion in 42-day cash management bills (CMB).

In the central bank space, the FOMC’s two-day meeting is scheduled to begin today.

The Bloomberg 30-day visible supply fell $2.246 billion to $8.178 billion on Monday, below the 12-month average of $9.081 billion.

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