Bond Market Commentary

Updates on bond market data, news, and activity each day.

October 22, 2018


Friday's Action

Treasuries declined Friday, lifting yields slightly higher along the curve as investors digested Fed commentary and continued to monitor developments across the pond. The European Union’s budget chief reassured market participants that discussions with Italy concerning the nation’s budget could still be resolved. The yield on the benchmark 10-year note gained one basis point to 3.19%, while the yield on the 30-year bond advanced two basis points to 3.38%. On the short end of the curve, the yield on the two-year note climbed four basis points to 2.91% amid a continuation of perceived hawkish remarks from Fed officials. On the data front, existing home sales fell for the sixth-straight month in September, hovering near the lowest level in three years.

Mortgages

Mortgage rates declined modestly in the most recent week, according to the Freddie Mac Primary Market Mortgage Survey® (PMMS®). For the period ending October 18th, 2018 the 30-year fixed rate mortgage slipped 5 basis points to 4.85%. This compares to 3.88% a year ago. The 15-year fixed rate mortgage fell 3 basis points to 4.26% from the prior week and compares to 3.19% this time last year. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.10%, up three points from a week ago and compares to 3.16% at this time last year.

Municipal Market Commentary

Tax-exempt new issue supply is expected to total $6.0 billion during the week of October 22, down from $10.5 billion the prior week but above the 2018 weekly average of $5.7 billion. The Bloomberg 30-day visible supply fell $1.462 billion to $9.389 billion on Friday, below the 12-month average of $10.247 billion.

This information is obtained from sources and data considered to be reliable, but its accuracy and completeness is not guaranteed by Wells Fargo Advisors.

Wells Fargo Investment Institute, Inc., is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.