Bond Market Commentary

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

December 18, 2018


Monday's Action

Treasuries strengthened along the curve Monday as a sell-off in U.S. equities inspired a rally in perceived “safe-haven” assets. The yield on the 10-year note lost two basis points to 2.86% while the yield on the 30-year bond fell three basis points to 3.12%. On the short end of the curve, the two-year note declined three basis points to 2.70%. The Federal Reserve’s two-day meeting which begins Tuesday will likely garner investor attention as market participants widely expect the fourth rate hike this year at the conclusion of the meeting on Wednesday. On the data front, a report from the New York Fed showed manufacturing activity expansion in the region eased to a 19-month low in December. In a separate report, a gauge of homebuilder confidence slumped to the lowest level since May 2015 in December.

Municipal Market Commentary

Tax-exempt new issue supply is expected to total $1.0 billion during the week of December 17, down from $8.0 billion the previous week and below the 2018 weekly average of $5.6 billion. The Bloomberg 30-day visible supply fell $1.0 billion to $2.879 billion on Monday, below the 12-month average of $8.979 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.

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