Bond Market Commentary

Over in bond land, Treasury yields are mostly higher before the opening bell Tuesday as markets await the upcoming next round of U.S.-Iran peace talks, with the two week ceasefire deadline expiring tomorrow. Investors are looking forward to today’s economic releases, including March’s retail sales and pending home sales, and will also be watching Kevin Warsh’s Federal Reserve (Fed) Chair confirmation hearing. As of 7:03 AM ET, the yield on the 10-year note is rising one basis point (0.01%) to 4.26%, while the 30-year bond yield is unchanged at 4.88%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up two basis points (0.02%) to 3.74%.

Treasury yields were mostly unchanged on Monday following news over the weekend that Iran would keep the Strait of Hormuz closed as the U.S. blockade continued. The yield on the 10-year note was unchanged at 4.25%, while the 30-year bond yield was also unchanged at 4.88%. The yield on the two-year note increased one basis point (0.01%) to 3.72%.

On the data front, retail sales and retail sales excluding autos are both expected to have risen 1.4% month-over-month (MOM) in March versus the prior month’s increases of 0.6% and 0.5%, respectively. Business inventories are expected to have increased by 0.3% MOM in February versus the prior month’s decrease of 0.1%. Meanwhile, pending home sales for March are expected to have increased 0.5% MOM versus the prior month’s increase of 1.8%.

In the auction space, the U.S. Treasury is set to issue $70 billion in six-week bills.

In the central bank space, Fed Governor Christopher Waller is scheduled to speak today.

The Bloomberg 30-day visible supply rose $3.285 billion to $16.0 billion on Monday, above the 12-month average of $14.065 billion.

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