Bond Market Commentary

Over in bond land, Treasury yields are lower before the opening bell Tuesday ahead of today’s May job openings data and June’s manufacturing purchasing managers’ indexes (PMIs). Investors are also looking forward to comments from Federal Reserve (Fed) Chair Jerome Powell. As of 6:48 AM ET, the yield on the 10-year note is decreasing four basis points (0.04%) to 4.19%, while the 30-year bond yield is falling three basis points (0.03%) 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 3.70%.

Treasury yields were lower on Monday to end out the month. The Market News International Chicago PMI for June unexpectedly fell to 40.4. Meanwhile, the Dallas Fed’s Texas Manufacturing Outlook Survey showed the general business activity index for June posting a weaker than expected improvement. The yield on the 10-year note was down five basis points (0.05%) to 4.23%, while the 30-year bond yield fell seven basis points (0.07%) to 4.77%. The yield on the two-year note decreased three basis points (0.03%) to 3.72%.

On the data front, the finalized reading of S&P Global’s manufacturing PMI for June is expected to remain unchanged from the prior reading of 52.0. The Institute for Supply Management’s June manufacturing PMI and prices paid component are expected to come in at 48.8 and 69.5, respectively, versus the prior month’s 48.5 and 69.4, respectively. Construction spending is projected to have decreased 0.2% month-over-month in May, versus the prior month’s decrease of 0.4%. The May Job Openings and Labor Turnover Survey (JOLTS) is forecasted to show job openings of 7.30 million, versus the prior month’s 7.39 million. The Dallas Fed will release their Texas Service Sector Outlook Survey for June.

In the auction space, the U.S. Treasury is set to issue $50 billion in six-week bills.

In the central bank space, Fed Chair Jerome Powell, along with other central bankers, will participate at the European Central Bank’s Forum on Central Banking in Sintra, Portugal.

The Bloomberg 30-day visible supply rose $1.560 billion to $7.809 billion on Monday, compared to the 12-month average of $13.772 billion.

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