Bond Market Commentary

Over in bond land, Treasury yields are lower before the opening bell Wednesday as markets react to news of a two-week ceasefire in the U.S.-Iran conflict and the planned reopening of the Strait of Hormuz, though there have been reports from several countries in the area of continued strikes. Investors are also looking forward to today’s release of the Federal Reserve’s (Fed’s) minutes from the March 18 Federal Open Market Committee meeting. As of 6:55 AM ET, the yield on the 10-year note is decreasing five basis points (0.05%) to 4.24%, while the 30-year bond yield is falling three basis points (0.03%) to 4.84%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down six basis points (0.06%) to 3.73%. 

Treasury yields were lower on Tuesday as the preliminary reading of durable goods orders for February registered a greater-than-expected decline from the previous month, falling 1.4%. Meanwhile, consumer credit showed a smaller-than-expected increase in February, expanding by $9.48 billion compared to the downwardly revised increase of $7.67 billion in January. The yield on the 10-year note was down four basis points (0.04%) to 4.29%, while the 30-year bond yield fell two basis points (0.02%) to 4.87%. The yield on the two-year note decreased six basis points (0.06%) to 3.79%.

On the data front, the Mortgage Bankers Association’s gauge of mortgage applications decreased by 0.8% for the week ending April 3 versus the prior week’s decrease of 10.4%. The Department of Energy’s measure of crude oil inventories is expected to have increased by 500,000 barrels for the week ending April 3 versus the prior week’s increase of 5.5 million barrels.

In the auction space, the U.S. Treasury is set to issue $69 billion in 17-week bills and $39 billion in 10-year notes.

In the central bank space, San Francisco Fed President Mary Daly is scheduled to speak today.

None at this time.

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