Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Tuesday as investors remained concerned about inflation stemming from the continuing Iran war despite President Donald Trump announcing that planned military action has been put on hold. Investors are also looking forward to April’s pending home sales report. As of 6:57 AM ET, the yield on the 10-year note is rising two basis points (0.02%) to 4.61%, while the 30-year bond yield is also increasing two basis points (0.02%) to 5.14%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up three basis points (0.03%) to 4.07%. 

Treasury yields were mostly unchanged on Monday as May homebuilder sentiment unexpectedly rose and the Federal Reserve Bank (Fed) of New York's Business Leaders Survey for May rose but still showed weakness in the region's service sector. The yield on the 10-year note was unchanged at 4.59%, while the 30-year bond yield was also unchanged at 5.12%. The yield on the two-year note decreased three basis points (0.03%) to 4.04%.

On the data front, pending home sales for April are expected to have increased 1.0% month-over-month and 2.1% year-over-year, versus the prior month’s increases of 1.5% and 1.8%, respectively.

In the auction space, the U.S. Treasury is set to issue $85 billion in six-week bills.

In the central bank space, Fed Governor Christopher Waller and Philadelphia Fed President Anna Paulson are scheduled to speak today.

The Bloomberg 30-day visible supply rose $6.279 billion to $17.385 billion on Monday, above the 12-month average of $13.912 billion.

This information is obtained from sources and data considered to be reliable, but its accuracy and completeness is not guaranteed by Wells Fargo Advisors. Additional information available by request.

Wells Fargo Advisors is registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered with any financial services regulatory authority outside of the U.S. Non-U.S. residents who maintain U.S.-based financial services account(s) with Wells Fargo Advisors may not be afforded certain protections conferred by legislation and regulations in their country of residence in respect of any investments, investment transactions or communications made with Wells Fargo Advisors.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.