Bond Market Commentary

Over in bond land, Treasury yields are lower before the opening bell Friday to end out the week as markets remain optimistic regarding the prospects for a near-term end to the Iran war. Next week, investors will be looking forward to March retail sales data and the preliminary reading of April purchasing managers’ indexes (PMIs). As of 6:55 AM ET, the yield on the 10-year note is decreasing one basis point (0.01%) to 4.30%, while the 30-year bond yield is also falling one basis point (0.01%) to 4.92%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down one basis point (0.01%) to 3.76%. 

Treasury yields were higher on Thursday as initial jobless claims declined, though continuing claims for the week prior picked up. March’s industrial production unexpectedly declined, falling by 0.5% month-over-month, while capacity utilization fell to 75.7%. The yield on the 10-year note was up three basis points (0.03%) to 4.31%, while the 30-year bond yield also rose three basis points (0.03%) to 4.93%. The yield on the two-year note increased one basis point (0.01%) to 3.77%. As of end of day Thursday (April 16), futures markets are pricing in no change in the policy rate at the Federal Reserve's (Fed’s) upcoming April meeting, with a cumulative nine basis points (0.09%) worth of rate cuts by year-end 2026.

In the central bank space, Fed Governor Christopher Waller, Richmond Fed President Tom Barkin, and San Francisco Fed President Mary Daly are scheduled to speak today.

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 $4.480 billion to $17.136 billion on Thursday, above the 12-month average of $14.115 billion.

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