Bond Market Commentary

Over in bond land, Treasury yields are slightly higher before the opening bell Friday to start off the month ahead of today’s April manufacturing purchasing managers’ index (PMI) from the Institute for Supply Management (ISM), with S&P Global releasing their finalized reading. As of 7:00 AM ET, the yield on the 10-year note is rising one basis point (0.01%) to 4.38%, while the 30-year bond yield is also increasing one basis point (0.01%) to 4.98%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up one basis point (0.01%) to 3.88%. 

Treasury yields were lower on Thursday following the advance reading of first-quarter gross domestic product (GDP) growth accelerating less than expected to an annualized 2.0%, while the core Personal Consumption Expenditures (PCE) Deflator picked up more than-projected to a 4.3% pace. Personal income and personal spending rose 0.6% and 0.9% month-over-month, respectively, while initial jobless claims fell significantly more-than-expected to the lowest level since 1969. The yield on the 10-year note was down six basis points (0.06%) to 4.37%, while the 30-year bond yield fell three basis points (0.03%) to 4.97%. The yield on the two-year note decreased eight basis points (0.08%) to 3.87%. As of end of day Thursday (April 30), futures markets are pricing in one basis point (0.01%) worth of rate cuts at the Federal Reserve's upcoming June meeting, with a cumulative three basis points (0.03%) worth of rate cuts by year-end 2026.

On the data front, ISM’s manufacturing PMI and the prices paid component for April are expected to come in at 53.2 and 80.3, respectively, up from the prior month’s 52.7 and 78.3, respectively. S&P Global’s finalized April manufacturing PMI is projected to remain unchanged from the preliminary reading of 54.0.

In the central bank space, Federal Reserve Governor Stephen Miran is scheduled to speak today.

Mortgage rates were higher in the latest week. For the week ending April 30, the average 30-year fixed mortgage rate was up seven basis points (0.07%) to 6.30%, versus 6.76% a year ago. The 15-year fixed mortgage rate increased six basis points (0.06%) to 5.64%, versus 5.92% a year ago.

Despite steady demand, primary supply remains a near term headwind, with 30-day visible supply just over $16.1 billion, above the $14.0 billion 12-month average.

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