Bond Market Commentary

Over in bond land, Treasury yields are lower before the opening bell Wednesday as investors await the release of the Federal Reserve’s (Fed’s) minutes from the April 29 Federal Open Market Committee meeting. Investors are also looking forward to a major technology company’s earnings report after markets close today. As of 6:55 AM ET, the yield on the 10-year note is decreasing three basis points (0.03%) to 4.64%, while the 30-year bond yield is falling two basis points (0.02%) to 5.16%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down three basis points (0.03%) to 4.09%. 

Treasury yields were higher on Tuesday following inflation concerns as negotiations to end the Iran war continue. Meanwhile, pending home sales for April registered stronger- than-expected growth of 1.4% month-over-month and 3.3% year-over-year. The yield on the 10-year note was up eight basis points (0.08%) to 4.67%, while the 30-year bond yield rose six basis points (0.06%) to 5.18%. The yield on the two-year note increased eight basis points (0.08%) to 4.12%.

On the data front, the Mortgage Banker Association’s gauge of mortgage applications decreased 2.3% for the week ending May 15 versus the prior week’s increase of 1.7%. The Department of Energy’s measure of crude oil inventories is expected to show a decline of 2.50 million barrels for the week ending May 15 versus the prior week’s decline of 4.31 million barrels.

In the auction space, the U.S. Treasury is set to issue $69 billion in 17-week bills and $16 billion in 20-year bonds.

In the central bank space, Fed Governor Michael Barr is scheduled to speak today.

The Bloomberg 30-day visible supply rose $3.742 billion to $21.128 billion on Tuesday, above the 12-month average of $13.940 billion.

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