Bond Market Commentary

Over in bond land, Treasury yields are mostly unchanged before the opening bell Monday ahead of today’s Empire State Manufacturing Survey. Investors are awaiting this week’s Federal Open Market Committee (FOMC) meeting on September 16–17, with futures markets broadly expecting the Federal Reserve (Fed) to cut their policy rate by 25 basis points (0.25%). Other key releases this week include retail sales, industrial production, and housing market data. As of 6:45 AM ET, the yield on the 10-year note is unchanged at 4.06%, while the 30-year bond yield is also unchanged at 4.68%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down one basis point (0.01%) to 3.55%.

Treasury yields were higher on Friday as the University of Michigan’s preliminary consumer sentiment index for September declined more than anticipated, while inflation expectations held steady at 4.8% for the one-year outlook and edged up to 3.9% for the 5-to-10-year horizon. The yield on the 10-year note was up four basis points (0.04%) to 4.06%, while the 30-year bond yield rose three basis points (0.03%) to 4.68%. The yield on the two-year note increased two basis points (0.02%) to 3.56%.

On the data front, the New York Fed will release September’s Empire State Manufacturing Survey, with the headline general business conditions index expected to come in at positive 5.0, down from the prior month’s positive 11.9.

In the auction space, the U.S. Treasury is set to issue $73 billion in 26-week bills and $82 billion in 13-week bills.

Mortgage rates were lower in the latest week. For the week ending September 11, the average 30-year fixed mortgage rate was down 15 basis points (0.15%) to 6.35%, versus 6.20% a year ago. The 15-year fixed mortgage rate decreased 10 basis points (0.10%) to 5.50%, versus 5.27% a year ago.

None at this time.

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