Bond Market Commentary

Over in bond land, Treasury yields are slightly higher before the opening bell Monday following a lack of progress in peace talks related to the Middle East conflict. Investors are looking forward to this week’s Federal Reserve (Fed) meeting, while economic releases include the advance reading of first-quarter gross domestic product (GDP) and March’s personal income, personal spending, and Personal Consumption Expenditures (PCE) deflator data, all scheduled for Thursday. As of 6:57 AM ET, the yield on the 10-year note is rising one basis point (0.01%) to 4.31%, while the 30-year bond yield is also increasing 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 up one basis point (0.01%) to 3.79%.

Treasury yields were mostly lower on Friday as the finalized April reading of consumer sentiment from the University of Michigan was revised higher than expected, with one-year inflation expectations revised lower to 4.7% and five-to-ten-year inflation expectations revised higher to 3.5%. The yield on the 10-year note was down two basis points (0.02%) to 4.30%, while the 30-year bond yield was unchanged at 4.91%. The yield on the two-year note decreased five basis points (0.05%) to 3.78%.

On the data front, the Dallas Fed’s Texas Manufacturing Outlook Survey for April will be released, with the general business activity index expected to come in at 0.8, up from the prior month’s -0.2.

In the auction space, the U.S. Treasury is set to issue $77 billion in 26-week bills, $69 billion in two-year notes, $89 billion in 13-week bills, and $70 billion in five-year notes.

Mortgage rates were lower in the latest week. For the week ending April 23, the average 30-year fixed mortgage rate was down seven basis points (0.07%) to 6.23%, versus 6.81% a year ago. The 15-year fixed mortgage rate decreased seven basis points (0.07%) to 5.58%, versus 5.94% a year ago.

The Bloomberg 30-day visible supply rose $1.279 billion to $14.686 billion on Friday, above the 12-month average of $14.047 billion.

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