Bond Market Commentary

Over in bond land, Treasury yields are mostly unchanged before the opening bell Friday ahead of a slew of Federal Reserve (Fed) speakers scheduled for today. Investors are looking particularly forward to Fed Chair Jerome Powell’s remarks today as markets hope to gain clarity on the future path of interest rates and monetary policy. As of 6:48 AM ET, the yield on the 10-year note is unchanged at 4.33%, while the 30-year bond yield is also unchanged at 4.92%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up one basis point (0.01%) to 3.80%.

Treasury yields were higher on Thursday as the preliminary reading of S&P Global’s August manufacturing purchasing managers’ index (PMI) unexpectedly rose into expansionary territory, while the services PMI registered a smaller-than-expected decline and remained solidly in expansionary territory. Existing home sales posted an unanticipated increase, while both initial and continuing jobless claims rose above forecasts. The leading index declined in line with forecasts for July. The yield on the 10-year note was up four basis points (0.04%) to 4.33%, while the 30-year bond yield rose three basis points (0.03%) to 4.92%. The yield on the two-year note increased four basis points (0.04%) to 3.79%.

In the central bank space, Fed Chair Jerome Powell, Boston Fed President Susan Collins, and Cleveland Fed President Beth Hammack are scheduled to speak today.

Medium-term mortgage rates were lower in the latest week. For the week ending August 21, the average 30-year fixed mortgage rate was flat at 6.58%, versus 6.46% a year ago. The 15-year fixed mortgage rate decreased two basis points (0.02%) to 5.69%, versus 5.62% a year ago.

The Bloomberg 30-day visible supply fell $148 million to $13.651 billion on Thursday, below the 12-month average of $14.057 billion.

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