Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Monday as investors are looking ahead to this week's key U.S. economic releases, including July Consumer Price Index data on Wednesday, July Producer Price Index data on Thursday, and both July retail sales and the preliminary August University of Michigan Consumer Sentiment Index on Friday. As of 6:58 AM ET, the yield on the 10-year note is rising two basis points (0.02%) to 4.67%, while the 30-year bond yield is also increasing two basis points (0.02%) to 5.22%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up two basis points (0.02%) to 4.22%. 

Treasury yields were lower on Friday as July nonfarm payrolls unexpectedly declined by 23,000, following a downward revision to the prior month's data. Average hourly earnings registered smaller-than projected-increases of 0.1% month-over-month and 3.2% year-over-year. Both the unemployment rate and the labor force participation rate eased to 4.1% and 61.4%, respectively. Consumer credit increased by a stronger-than-expected $14.17 billion in June. The yield on the 10-year note was down three basis points (0.03%) to 4.65%, while the 30-year bond yield fell two basis points (0.02%) to 5.20%. The yield on the two-year note decreased five basis points (0.05%) to 4.20%.

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.

In the central bank space, Federal Reserve Bank of Cleveland President Beth Hammack is scheduled to speak today.

Mortgage rates were mixed in the latest week. For the week ending August 6, the average 30-year fixed mortgage rate was up three basis points (0.03%) to 6.69%, versus 6.63% a year ago. The 15-year fixed mortgage rate decreased three basis points (0.03%) to 6.01%, versus 5.75% a year ago.

The Bloomberg 30-day visible supply rose $1.789 billion to $20.191 billion on Friday, above the 12-month average of $14.166 billion.

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