Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Friday as markets remain concerned about the impact and duration of the Iran war despite President Donald Trump announcing an extension of the postponement of strikes on Iranian energy facilities. Investors are awaiting today’s finalized March consumer sentiment data from the University of Michigan, along with looking forward to next week’s March jobs report and other labor market data. As of 6:57 AM ET, the yield on the 10-year note is rising five basis points (0.05%) to 4.46%, while the 30-year bond yield is also increasing five basis points (0.05%) to 4.98%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up two basis points (0.02%) to 4.01%.

Treasury yields were higher on Thursday as initial jobless claims picked up, though continuing claims for the week prior fell. The yield on the 10-year note was up eight basis points (0.08%) to 4.41%, while the 30-year bond yield rose three basis points (0.03%) to 4.93%. The yield on the two-year note increased 10 basis points (0.10%) to 3.99%. As of end of day Thursday (March 26), futures markets are pricing in two basis points (0.02%) worth of rate hikes at the Federal Reserve's (Fed’s) upcoming April meeting, with a cumulative 14 basis points (0.14%) worth of rate hikes by year-end 2026 and a cumulative nine basis points (0.09%) worth of rate hikes by year-end 2027.

On the data front, the finalized reading of March consumer sentiment from the University of Michigan is expected to come in at 54.0 versus the initial reading of 55.5, while one-year and 5-10-year inflation expectations are projected to come in at 3.6% and 3.5%, respectively, compared to the initial readings 3.4% and 3.2%, respectively. The Kansas City Fed will release their services survey for March, with the Composite Index expected to come in at 4, down from the prior month’s reading of 6.

In the central bank space, Richmond Fed President Tom Barkin, San Francisco Fed President Mary Daly, and Philadelphia Fed President Anna Paulson are scheduled to speak today.

Mortgage rates were higher in the latest week. For the week ending March 26, the average 30-year fixed mortgage rate was up 16 basis points (0.16%) to 6.38%, versus 6.65% a year ago. The 15-year fixed mortgage rate increased 21 basis points (0.21%) to 5.75%, versus 5.89% a year ago.

The Bloomberg 30-day visible supply fell $3.699 billion to $15.394 billion on Thursday, above the 12-month average of $14.131 billion.

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