May 2, 2024
Over in bond land, Treasury yields are lower before the opening bell Thursday as investors await the release of factory orders and labor market data. The yield on the 10-year note is decreasing two basis points (0.02%) to 4.61%, while the 30-year bond yield is falling one basis point (0.01%) to 4.74%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down two basis points (0.02%) to 4.94%.
Treasury yields were lower on Wednesday, with the Federal Reserve (Fed) deciding to hold interest rates steady. Fed Chair Jerome Powell suggested that the next rate decision is unlikely to involve a hike. He mentioned that policymakers would require compelling evidence indicating that the current policy stance is not adequately curbing inflation to raise rates. The yield on the 10-year note was down five basis points (0.05%) to 4.63%, while the 30-year bond yield fell three basis points (0.03%) to 4.75%. The yield on the two-year note decreased eight basis points (0.08%) to 4.96%.
On the data front today, initial jobless claims for the week ending April 27 are expected to be 211,000, higher than the prior week’s 207,000, while continuing claims for the week ending April 20 are projected to register 1.79 million, slightly higher than the prior week’s 1.78 million. March’s factory orders are expected to increase 1.6% versus the previous month’s increase of 1.4%, while the final release of March’s durable goods orders are projected to increase 2.6%, unchanged from the prior reading. The trade balance for March is projected to record a negative $69.7 billion versus the previous month’s negative $68.9 billion. The preliminary reading for the first quarter’s non-farm productivity is expected to increase 0.5% quarter over quarter versus the prior quarter’s 3.3%, while the first quarter’s unit labor costs are expected to increase 4.0% quarter over quarter versus the prior quarter’s 0.4%.
In the auction space, the U.S. Treasury is set to issue $70 billion in four-week bills and $75 billion in eight-week bills.
Municipal Market Commentary
The Bloomberg 30-day visible supply fell $718 million to $8.438 billion on Wednesday, below the 12-month average of $9.078 billion.
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