Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Monday as investors’ optimism faded following Iran continuing their closure of the Strait of Hormuz, citing the ongoing U.S. blockade of ships from Iranian ports, with the U.S. seizing one such ship over the weekend. Investors will also be looking forward to tomorrow’s release of March retail sales and pending home sales data, along with Thursday’s preliminary April purchasing managers’ indexes. As of 6:58 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 also increasing one basis point (0.01%) to 4.89%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up one basis point (0.01%) to 3.72%.

Treasury yields were lower on Friday as markets had been optimistic regarding the reopening of the Strait of Hormuz and potential peace talks. The yield on the 10-year note was down six basis points (0.06%) to 4.25%, while the 30-year bond yield fell five basis points (0.05%) to 4.88%. The yield on the two-year note decreased six basis points (0.06%) to 3.71%.

In the auction space, the U.S. Treasury is set to issue $89 billion in 13-week bills and $77 billion in 26-week bills.

Mortgage rates were lower in the latest week. For the week ending April 16, the average 30-year fixed mortgage rate was down seven basis points (0.07%) to 6.30%, versus 6.83% a year ago. The 15-year fixed mortgage rate decreased nine basis points (0.09%) to 5.65%, versus 6.03% a year ago.

The Bloomberg 30-day visible supply fell $4.421 billion to $12.715 billion on Friday, below the 12-month average of $14.084 billion.

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