Bond Market Commentary

Over in bond land, Treasury yields are little changed before the opening bell Monday ahead of today’s August inflation expectations and July’s consumer credit data. Investors will also be looking ahead to Producer Price Index (PPI) and Consumer Price Index (CPI) data out Wednesday and Thursday, respectively. As of 6:41 AM ET, the yield on the 10-year note is rising one basis point (0.01%) to 4.08%, while the 30-year bond yield is also increasing one basis point (0.01%) to 4.77%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down one basis point (0.01%) to 3.50%.

Treasury yields were lower on Friday as both nonfarm and manufacturing payrolls for August came in below expectations, increasing by just 22,000 and falling by 12,000, respectively. Both the unemployment rate and the labor force participation rate ticked up, rising to 4.3% and 62.3%, respectively. Average hourly earnings rose 0.3% month-over-month as expected, but the 3.7% year-over-year increase came in below forecasts. The yield on the 10-year note was down nine basis points (0.09%) to 4.07%, while the 30-year bond yield also fell nine basis points (0.09%) to 4.76%. The yield on the two-year note decreased eight basis points (0.08%) to 3.51%.

On the data front, the Federal Reserve Bank of New York will release their August Survey of Consumer Expectations, including a measure of inflation expectations. Consumer credit is expected to have expanded by $10.20 billion in July, more than the prior month’s increase of $7.37 billion.

In the auction space, the U.S. Treasury is set to issue $82 billion in 13-week bills and $73 billion in 26-week bills.

Mortgage rates were lower in the latest week. For the week ending September 4, the average 30-year fixed mortgage rate was down six basis points (0.06%) to 6.50%, versus 6.35% a year ago. The 15-year fixed mortgage rate decreased 9 basis points (0.09%) to 5.60%, versus 5.47% a year ago.

None at this time.

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