Bond Market Commentary

Over in bond land, Treasury yields are mostly higher before the opening bell Tuesday as investors await updates on a proposal to reopen the Strait of Hormuz and looked ahead to tomorrow's Federal Reserve (Fed) meeting. Investors are also looking forward ahead to today’s data releases, including April consumer confidence and February home price data. As of 6:53 AM ET, the yield on the 10-year note is rising one basis point (0.01%) to 4.35%, while the 30-year bond yield is unchanged at 4.95%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up two basis points (0.02%) to 3.82%. 

Treasury yields were higher on Monday as the Dallas Fed’s Texas Manufacturing Outlook Survey showed the general business activity index for April unexpectedly declining to -2.3. The yield on the 10-year note was up four basis points (0.04%) to 4.34%, while the 30-year bond yield also rose four basis points (0.04%) to 4.95%. The yield on the two-year note increased two basis points (0.02%) to 3.80%.

On the data front, the Federal Housing Finance Agency’s House Price Index is expected to show an increase of 0.1% month-over-month (MOM) in February, similar to the prior month’s increase. The S&P Cotality Case-Shiller 20-City Home Price Index for February is expected to register increases of 0.15% MOM and 1.12% year-over-year (YOY), versus the prior month’s increases of 0.16% and of 1.18%, respectively. The Richmond Fed’s April Fifth District Survey of Manufacturing Activity will be released today, with the headline composite manufacturing index expected to edge up to 1, following the prior month’s 0. The Conference Board’s reading of April consumer confidence is projected to come in at 89.0 versus the prior month’s 91.8. The Dallas Fed’s Texas Service Sector Outlook Survey for April will be released, with the general business activity index expected to come in at -12.0, up from the prior month’s -13.3.

In the auction space, the U.S. Treasury is set to issue $70 billion in six-week bills, $30 billion in two-year floating rate notes, and $44 billion in seven-year notes.

The Bloomberg 30-day visible supply rose $98 million to $14.784 billion on Monday, above the 12-month average of $14.031 billion.

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