Bond Market Commentary

Over in bond land, Treasury yields are lower before the opening bell Wednesday ahead of comments from several Federal Reserve (Fed) members. Investors are also awaiting this week’s April Producer Price Index data along with the University of Michigan’s preliminary reading on consumer sentiment for May out tomorrow and Friday, respectively. As of 6:46 AM ET, the yield on the 10-year note is decreasing one basis point (0.01%) to 4.46%, while the 30-year bond yield is also falling one basis point (0.01%) to 4.90%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down one basis point (0.01%) to 3.99%.

Treasury yields were mostly unchanged on Tuesday as the April Consumer Price Index (CPI) came in cooler than expected month-over-month (MOM) on a headline and core basis. Meanwhile, the headline CPI decelerated to 2.3% year-over-year (YOY), while the core measure remained unchanged at 2.8% YOY. The yield on the 10-year note was unchanged at 4.47%, while the 30-year bond yield was also unchanged at 4.91%. The yield on the two-year note decreased one basis point (0.01%) to 4.00%.

On the data front, the Mortgage Bankers Association’s gauge of mortgage applications increased by 1.1% for the week ending May 9 versus the prior week’s increase of 11.0%. The Department of Energy’s measure of crude oil inventories is expected to decline by 2.21 million barrels for the week ending May 9 versus the prior week’s decrease of 2.03 million barrels.

In the auction space, the U.S. Treasury is set to issue $60 billion in 17-week bills.

In the central bank space, Fed Vice Chair Philip Jefferson, Fed Governor Christopher Waller, San Francisco Fed President Mary Daly, and Chicago Fed President Austan Goolsbee are scheduled to speak today.

The Bloomberg 30-day visible supply rose $2.534 billion to $20.425 billion on Tuesday, compared to the 12-month average of $13.099 billion.

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