Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Monday as markets continue to assess developments in the Iran War, with oil prices rising significantly over the weekend. Investors are also awaiting this week’s economic data, including February’s Consumer Price Index on Wednesday, along with January’s personal income, personal spending, and Personal Consumption Expenditures (PCE) deflator figures, due Friday. As of 6:58 AM ET, the yield on the 10-year note is rising four basis points (0.04%) to 4.18%, while the 30-year bond yield is increasing four basis points (0.04%) to 4.80%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up five basis points (0.05%) to 3.61%. 

Treasury yields were mixed on Friday as nonfarm payrolls unexpectedly fell by 92,000 in February and the figures for the prior two months were revised downward by a net 69,000. The unemployment rate edged up to 4.4%, while the labor force participation rate slipped to 62.0%. Meanwhile, retail sales posted a smaller decline than anticipated in January. The yield on the 10-year note was flat at 4.14%, while the 30-year bond yield rose one basis point (0.01%) to 4.76%. The yield on the two-year note decreased two basis points (0.02%) to 3.56%.

On the data front, the Federal Reserve Bank of New York will release their February Survey of Consumer Expectations, including a measure of inflation expectations.

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 mixed in the latest week. For the week ending March 5, the average 30-year fixed mortgage rate was up two basis points (0.02%) to 6.00%, versus 6.63% a year ago. The 15-year fixed mortgage rate decreased one basis point (0.01%) to 5.43%, versus 5.79% a year ago.

The Bloomberg 30-day visible supply rose $1.698 billion to $16.660 billion on Friday, above the 12-month average of $13.966 billion.

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