Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Tuesday as small business optimism declined and ahead of today’s February existing home sales data release. Investors are also looking forward to tomorrow’s February Consumer Price Index data. As of 6:55 AM ET, the yield on the 10-year note is rising two basis points (0.02%) to 4.12%, while the 30-year bond yield is increasing four basis points (0.04%) to 4.75%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up two basis points (0.02%) to 3.56%. 

Treasury yields were lower on Monday despite intraday volatility as hopes grew for a quick resolution to the Iran War following comments late in the day from President Donald Trump. The yield on the 10-year note was down four basis points (0.04%) to 4.10%, while the 30-year bond yield fell six basis points (0.06%) to 4.71%. The yield on the two-year note decreased two basis points (0.02%) to 3.54%.

On the data front, the National Federation of Independent Business’s gauge of small business optimism unexpectedly decreased to 98.8 in February from the prior month’s 99.3. Existing home sales are forecasted to have been at an annualized 3.88 million pace in February versus the prior month’s 3.91 million pace, corresponding to a decrease of 0.8% versus the prior month’s decrease of 8.4%.

In the auction space, the U.S. Treasury is set to issue $90 billion in six-week bills and $58 billion in three-year notes.

The Bloomberg 30-day visible supply rose $64 million to $16.924 billion on Monday, above the 12-month average of $13.975 billion.

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