Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Monday amid further developments in the U.S.-Iran conflict. Looking ahead, investors will closely monitor S&P Global’s preliminary July manufacturing and services purchasing managers’ index data scheduled for release on Friday. As of 6:57 AM ET, the yield on the 10-year note is rising one basis point (0.01%) to 4.56%, while the 30-year bond yield is also increasing one basis point (0.01%) to 5.08%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up one basis point (0.01%) to 4.19%.

Treasury yields were mixed on Friday as the University of Michigan’s preliminary consumer sentiment index for July increased more than anticipated and short-term inflation expectations eased. Import prices unexpectedly rose, while export prices fell less than anticipated. Industrial production showed a weaker-than-expected increase in June. Meanwhile, housing starts increased more than expected in June and preliminary building permits fell short of projections. The yield on the 10-year note was unchanged at 4.55%, while the 30-year bond yield fell one basis point (0.01%) to 5.07%. The yield on the two-year note increased four basis points (0.04%) to 4.18%.

On the data front, the Leading Index for June is forecasted to show a decline of 0.1%, versus the prior month’s increase of 0.1%.

In the auction space, the U.S. Treasury is set to issue $92 billion in 13-week bills and $79 billion in 26-week bills.

Mortgage rates were higher in the latest week. For the week ending July 16, the average 30-year fixed mortgage rate was up six basis points (0.06%) to 6.55%, versus 6.75% a year ago. The 15-year fixed mortgage rate increased 11 basis points (0.11%) to 5.93%, versus 5.92% a year ago.

The Bloomberg 30-day visible supply fell $1.853 billion to $14.190 billion on Friday, above the 12-month average of $13.997 billion.

This information is obtained from sources and data considered to be reliable, but its accuracy and completeness is not guaranteed by Wells Fargo Advisors. Additional information available by request.

Wells Fargo Advisors is registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered with any financial services regulatory authority outside of the U.S. Non-U.S. residents who maintain U.S.-based financial services account(s) with Wells Fargo Advisors may not be afforded certain protections conferred by legislation and regulations in their country of residence in respect of any investments, investment transactions or communications made with Wells Fargo Advisors.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.