Bond Market Commentary

Over in bond land, Treasury yields are mostly unchanged before the opening bell Tuesday ahead of today’s economic releases, including June consumer confidence and May job openings. Investors will also be closely watching any developments in U.S.-Iran peace deal progress. As of 6:55 AM ET, the yield on the 10-year note is unchanged at 4.37%, while the 30-year bond yield is falling one basis point (0.01%) to 4.85%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is unchanged at 4.10%.

Treasury yields were mostly unchanged on Monday as tensions between the U.S. and Iran eased following a flare up over the weekend. The Federal Reserve (Fed) Bank of Dallas’s Texas Manufacturing Outlook Survey showed the general business activity index for June unexpectedly falling slightly. The yield on the 10-year note was unchanged at 4.37%, while the 30-year bond yield was also unchanged at 4.86%. The yield on the two-year note increased one basis point (0.01%) to 4.10%.

On the data front, the Federal Housing Finance Agency’s House Price Index is expected to rise 0.2% month-over-month (MOM) in April, compared to the prior month’s increase of 0.1%. The S&P Cotality Case-Shiller 20-City Home Price Index for April is expected to register a decrease of 0.10% MOM and an increase of 0.90% year-over year (YOY), versus the prior month’s decrease of 0.16% MOM and increase of 0.83% YOY, respectively. Meanwhile, the Market News International Chicago purchasing managers’ index for June is expected to come in at 55.1, down from the prior month’s 62.7. The Conference Board’s reading of June consumer confidence is projected to come in at 94.4 versus the prior month’s 93.1. The May Job Openings and Labor Turnover Survey (JOLTS) is forecasted to show job openings of 7.30 million, versus the prior month’s 7.62 million. The Dallas Fed’s Texas Service Sector Outlook Survey for June will be released, with the headline general business activity index expected to rise to -5.0 from last month’s -7.7.

In the auction space, the U.S. Treasury is set to issue $80 billion in six-week bills.

The Bloomberg 30-day visible supply fell $420 million to $12.720 billion on Monday, below the 12-month average of $13.915 billion.

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