Bond Market Commentary

Over in bond land, Treasury yields are mixed before the opening bell Thursday as investors are closely watching the developments in the renewed escalation between the U.S. and Iran, with both countries conducting military strikes. Investors are also looking ahead to today’s economic releases including weekly initial and continuing jobless claims along with June’s existing home sales data. As of 7:02 AM ET, the yield on the 10-year note is unchanged at 4.58%, while the 30-year bond yield is increasing two basis points (0.02%) to 5.09%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down two basis points (0.02%) to 4.20%.

Treasury yields were higher on Wednesday as consumer credit unexpectedly decreased in May, shrinking by $182 million, following an upward revision of April’s increase to $20.82 billion. Meanwhile, the Federal Reserve’s (Fed’s) July 17 Federal Open Market Committee meeting minutes showed Fed officials remain divided on the future path of interest rates. The yield on the 10-year note was up three basis points (0.03%) to 4.58%, while the 30-year bond yield rose one basis point (0.01%) to 5.07%. The yield on the two-year note increased four basis points (0.04%) to 4.22%.

On the data front, initial jobless claims for the week ending July 4 are expected to come in at 217,000, higher than the prior week’s 215,000, while continuing claims are expected to remain stable at 1.814 million for the week ending June 27. Existing home sales are forecasted to have been at an annualized 4.20 million pace in June versus the prior month’s 4.17 million pace.

In the auction space, the U.S. Treasury is set to issue $100 billion in four-week bills, $95 billion in eight-week bills, and $22 billion in 30-year bonds.

In the central bank space, Fed Bank of Dallas President Lorie Logan and New York Fed President John Williams are scheduled to speak today.

The Bloomberg 30-day visible supply rose $1.247 billion to $17.257 billion on Wednesday, above the 12-month average of $13.995 billion.

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