Bond Market Commentary
Updates on bond market data, news, and activity each day.
Treasury yields continued their ascent on Friday amid a strong week of economic data and hawkish sentiment from Federal Reserve members. There were no economic updates on Friday but strong employment data earlier in the week remained a catalyst for rising rates. The yield on the benchmark 10-year note climbed four basis points and finished at 2.96%, the highest level since January 2014. On the short end of the curve the yield on the two-year note added two basis points to finish at 2.46%. In central bank news, Chicago Federal Reserve President Charles Evans stated he believes a path of gradual interest rate hikes is appropriate in the current economic environment. On the long end of the curve the 30-year bond finished up four basis points to 3.14%.
Mortgage rates climbed this week as treasury yields spiked to multi-year highs, according to Freddie Mac Primary Market Mortgage Survey® (PMMS®). For the period ending April 19, 2018, the 30-year fixed rate mortgage added five basis points to 4.47%. This compares to 3.97% a year ago. The 15-year fixed rate mortgage climbed seven basis points for the week to 3.94%, and compares to 3.23% this time last year. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.67%, up six basis points from a week ago and compares to 3.17% last year.
Municipal Market Commentary
Last week, the municipal market indices showed that muni bonds were weaker. Tax-exempt new issue supply is expected to total approximately $7.6 billion the week of April 23, up from $5.1 billion the prior week and above the 2018 weekly average of $4.6 billion. The Bloomberg 30-day visible supply fell $222 million to $9.721 billion on Friday, below the 12-month average of $11.171 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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