Bond Market Commentary

Over in bond land, Treasury yields are mixed before the opening bell Monday as markets assess the latest strikes by the U.S. and Iran. Investors are awaiting a barrage of labor market and purchasing managers’ index (PMI) data this week, starting with tomorrow’s July Job Openings and Labor Turnover Survey (JOLTS) and the Institute for Supply Management’s August manufacturing PMI. As of 7:02 AM ET, the yield on the 10-year note is unchanged at 4.72%, while the 30-year bond yield is increasing one basis point (0.01%) to 5.22%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down two basis points (0.02%) to 4.32%. 

Treasury yields were higher on Friday as investors reacted to Federal Reserve (Fed) Chair Kevin Warsh’s hawkish comments at the Fed’s Jackson Hole Economic Symposium. Meanwhile, the finalized August reading of consumer sentiment from the University of Michigan was unexpectedly revised higher to 51.7. The yield on the 10-year note was up four basis points (0.04%) to 4.72%, while the 30-year bond yield rose two basis points (0.02%) to 5.21%. The yield on the two-year note increased 11 basis points (0.11%) to 4.34%.

On the data front, the Dallas Fed’s Texas Manufacturing Outlook Survey for August will be released, with the general business activity index expected to come in at 1.6, up from the prior month’s 1.3.

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

Mortgage rates were higher in the latest week. For the week ending August 27, the average 30-year fixed mortgage rate was up one basis point (0.01%) to 6.66%, versus 6.56% a year ago. The 15-year fixed mortgage rate increased three basis points (0.03%) to 5.98%, versus 5.69% a year ago.

The Bloomberg 30-day visible supply rose $140.3 million to $27.225 billion on Friday, a 12-month high.

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