Bond Market Commentary

Over in bond land, Treasury yields are lower before the opening bell Monday ahead of the final trading days of the year as investors are looking forward to pending home sales data. As of 6:55 AM ET, the yield on the 10-year note is decreasing two basis points (0.02%) to 4.11%, while the 30-year bond yield is also falling two basis points (0.02%) to 4.79%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down one basis point (0.01%) to 3.47%.

Treasury yields were lower on Friday during thin, post-holiday trading. The yield on the 10-year note was down four basis points (0.04%) to 4.13%, while the 30-year bond yield fell two basis points (0.02%) to 4.81%. The yield on the two-year note decreased five basis points (0.05%) to 3.48%.

On the data front, pending home sales for November are expected to have increased 1.0% month-over month versus the prior month’s increase of 1.9%. The Department of Energy’s measure of crude oil inventories is expected to have decreased by 2.00 million barrels for the week ending December 19 versus the prior week’s decrease of 1.27 million barrels. The Federal Reserve Bank of Dallas’s Texas Manufacturing Outlook Survey for December will be released, with the general business activity index expected to come in at negative 6.0, up from the prior month’s negative 10.4.

In the auction space, the U.S. Treasury is set to issue $86 billion in 13-week bills and $77 billion in 26-week bills.

Mortgage rates were mixed in the latest week. For the week ending December 25, the average 30-year fixed mortgage rate was down three basis points (0.03%) to 6.18%, versus 6.85% a year ago. The 15-year fixed mortgage rate increased three basis points (0.03%) to 5.50%, versus 6.00% a year ago.

None at this time.

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