Bond Market Commentary

Over in bond land, Treasury yields are lower before the opening bell Monday after a pause in strikes by the U.S. and Iran and ahead of today’s release of June’s preliminary durable goods data. This week, highlights include the Federal Reserve’s (Fed’s) meeting ending Wednesday, along with Thursday’s June Personal Consumption Expenditures Deflator and advance reading of second-quarter gross domestic product. As of 7:03 AM ET, the yield on the 10-year note is decreasing four basis points (0.04%) to 4.64%, while the 30-year bond yield is also falling four basis points (0.04%) to 5.12%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down two basis points (0.02%) to 4.31%. 

Treasury yields were mostly lower on Friday as the preliminary July readings of S&P Global’s composite and services Purchasing Managers’ Indexes (PMIs) exceeded expectations, with both PMIs rising to 53.6. In contrast, the manufacturing PMI unexpectedly eased to 53.8. June new home sales increased to an annualized pace of 628,000 units. The yield on the 10-year note was down one basis point (0.01%) to 4.68%, while the 30-year bond yield was unchanged at 5.16%. The yield on the two-year note decreased two basis points (0.02%) to 4.33%.

On the data front, the preliminary reading of June’s durable goods orders is forecasted to show an increase of 1.8% month-over-month, compared to the prior month’s 4.5% decrease. Meanwhile, the Dallas Fed’s Texas Manufacturing Outlook Survey for July will be released, with the general business activity index forecasted to improve to 2.0 from the prior month’s 0.0.

In the auction space, the U.S. Treasury is set to issue $79 billion in 26-week bills, $69 billion in two-year notes, $92 billion in 13-week bills, and $70 billion in five-year notes.

Mortgage rates were higher in the latest week. For the week ending July 23, the average 30-year fixed mortgage rate was up three basis points (0.03%) to 6.58%, versus 6.74% a year ago. The 15-year fixed mortgage rate increased three basis points (0.03%) to 5.96%, versus 5.87% a year ago.

None at this time.

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