Bond Market Commentary

Over in bond land, Treasury yields are unchanged before the opening bell Wednesday ahead of today’s shortened trading session as investors look forward to data on initial and continuing jobless claims. As of 6:59 AM ET, the yield on the 10-year note is unchanged at 4.16%, while the 30-year bond yield is also unchanged at 4.82%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is unchanged at 3.53%.

Treasury yields were mixed on Tuesday as third-quarter gross domestic product growth came in at a 4.3% annualized pace, while consumer spending came in stronger than expected at a 3.5% annualized pace. Meanwhile, the preliminary reading of durable goods orders for October fell more than projected. November's industrial production rose following a decline in October. Consumer confidence declined more than anticipated in December, dropping to 89.1 from the prior month’s upwardly revised 92.9. The yield on the 10-year note was unchanged at 4.16%, while the 30-year bond yield fell two basis points (0.02%) to 4.82%. The yield on the two-year note increased two basis points (0.02%) to 3.53%.

On the data front, the Mortgage Banker Association’s gauge of mortgage applications decreased by 5.0% for the week ending December 19 versus the prior week’s decrease of 3.8%. Initial jobless claims for the week ending December 20 are expected to come in at 224,000, similar to prior week’s reading, while continuing claims are expected to come in at 1.900 million for the week ending December 13, slightly up from the prior week’s 1.897 million.

In the auction space, the U.S. Treasury is set to issue $80 billion in four-week bills, $80 billion in eight-week bills, $69 billion in 17-week bills, and $44 billion in seven-year notes.

None at this time.

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