Bond Market Commentary

Over in bond land, Treasury yields are mostly unchanged before the opening bell Thursday as investors are awaiting key data releases, including the third reading of second-quarter gross domestic product (GDP), August’s durable goods orders, and an update on jobless claims. Investors will also be listening in to a slew of Federal Reserve (Fed) speakers scheduled for today. As of 6:46 AM ET, the yield on the 10-year note is unchanged at 4.15%, while the 30-year bond yield is also unchanged at 4.75%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up one basis point (0.01%) to 3.61%.

Treasury yields were higher on Wednesday as new home sales increased significantly, rising by 20.5% month-over-month (MOM) to an annualized rate of 800,000 in August after the prior month’s data was revised higher. The yield on the 10-year note was up four basis points (0.04%) to 4.15%, while the 30-year bond yield rose three basis points (0.03%) to 4.75%. The yield on the two-year note increased one basis point (0.01%) to 3.60%.

On the data front, the third readings of second-quarter GDP, the GDP Price Index, the core Personal Consumption Expenditures Price Index, and personal consumption are expected to come in at annualized growth rates of 3.3%, 2.0%, 2.5% and 1.7%, respectively. The advance goods trade balance for August is expected to show a deficit of $95.4 billion versus the prior month’s revised deficit of $102.8 billion. The preliminary August reading of wholesale inventories is expected to show an increase of 0.1% MOM, similar to the prior month’s increase. Meanwhile, the preliminary reading of August’s durable goods orders is forecasted to show a 0.3% MOM decline, compared to the prior month’s 2.8% decrease. Initial jobless claims for the week ending September 20 are expected to come in at 233,000, higher than the prior week’s 231,000, while continuing claims are expected to rise slightly to 1.93 million for the week ending September 13 from the prior week’s 1.92 million. Existing home sales are forecasted to have been at an annualized 3.95 million pace in August versus the prior month’s 4.01 million pace, corresponding to a decrease of 1.5% versus the prior month’s increase of 2.0%.

In the auction space, the U.S. Treasury is set to issue $85 billion in eight-week bills, $100 billion in four-week bills, and $44 billion in seven-year notes.

In the central bank space, Fed Vice Chair for Supervision Michelle Bowman, Fed Governor Michael Barr, Fed Governor Stephen Miran, San Francisco Fed President Mary Daly, Chicago Fed President Austan Goolsbee, Dallas Fed President Lorie Logan, Kansas City Fed President Jeffrey Schmid, and New York Fed President John Williams are scheduled to speak today.

None at this time.

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