Bond Market Commentary

Over in bond land, Treasury yields are mostly higher before the opening bell Thursday ahead of today’s economic releases, including data on unemployment claims and factory orders. As of 6:56 AM ET, the yield on the 10-year note is rising two basis points (0.02%) to 4.08%, while the 30-year bond yield is unchanged at 4.73%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up two basis points (0.02%) to 3.50%.

Treasury yields were lower on Wednesday as the ADP employment report showed a 32,000 decline in private nonfarm payrolls. The Institute for Supply Management’s November services purchasing managers’ index unexpectedly rose to 52.6, while S&P Global’s finalized reading was revised downward to 54.1. Industrial production rose slightly in September and capacity utilization held at the prior month’s downwardly revised 75.9%. The yield on the 10-year note was down three basis points (0.03%) to 4.06%, while the 30-year bond yield fell two basis points (0.02%) to 4.73%. The yield on the two-year note decreased three basis points (0.03%) to 3.48%.

On the data front, the Challenger Report on job cuts for November is expected to show a 48.0% year-over-year increase versus the prior month’s 175.3%. Initial jobless claims for the week ending November 29 are expected to come in at 220,000, higher than the prior week’s 216,000, while continuing claims are expected to remain stable at 1.96 million for the week ending November 22. Meanwhile, September’s factory orders are expected to have increased 0.3% month-over-month versus the prior month’s increase of 1.4%.

In the auction space, the U.S. Treasury is set to issue $90 billion in four-week bills and $80 billion in eight-week bills.

In the central bank space, Federal Reserve Vice Chair for Supervision Michelle Bowman is scheduled to speak today.

The Bloomberg 30-day visible supply rose $1.077 billion to $19.730 billion on Wednesday, above the 12-month average of $13.917 billion.

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