January 23, 2020
U.S. Treasuries strengthened Wednesday as the yield curve flattened amid cautious risk sentiment from investors as they monitored the coronavirus outbreak. Deaths from the virus have increased to 17 with more than 500 cases confirmed. The yield on the benchmark ten-year note fell one basis point to 1.76%, while the yield on the 30-year bond was off two basis points to 2.21%. On the short end of the curve, the yield on the two-year note remained unchanged at 1.52%. On the data front, existing home sales advanced 3.6% in December, the fastest rate in nearly two years. Another report from the FHFA showed U.S. house prices rose 0.2% in November. Separately, the Chicago Fed National Activity Index showed a slump in economic activity last month. An additional release revealed MBA mortgage applications dipped 1.2% in most recent week. The Federal reserve is currently in a quiet period until its January 29th FOMC meeting where the benchmark policy rate is widely expected to remain unchanged.
Municipal Market Commentary
Tax-exempt new issue supply is expected to total $5.0 billion during the week of January 21st, compared to the 2019 weekly average of $6.2 billion. The Bloomberg 30-day visible supply rose $1.075 billion to $13.254 billion on Wednesday, above the 12-month average of $12.126 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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