Bond Market Commentary

Over in bond land, Treasury yields are slightly higher before the opening bell Wednesday as investors digested yesterday’s earnings reports from two major artificial intelligence companies and await further mega-cap companies’ earnings reports after markets close today. As of 6:54 AM ET, the yield on the 10-year note is rising one basis point (0.01%) to 5.12%, while the 30-year bond yield is also increasing one basis point (0.01%) to 5.43%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up one basis point (0.01%) to 4.79%.

Treasury yields were mixed on Tuesday as September housing market data showed slowdowns in housing starts, building permits, and pending home sales, with the latter falling by a greater-than-expected 7.3% month-over-month. The yield on the 10-year note was down three basis points (0.03%) to 5.11%, while the 30-year bond yield fell five basis points (0.05%) to 5.42%. The yield on the two-year note increased one basis point (0.01%) to 4.78%.

On the data front, the Mortgage Bankers Association’s gauge of mortgage applications for the week ending October 16 fell 5.3%, compared to the prior week’s decline of 2.7%. The Department of Energy’s measure of crude oil inventories is expected to decline by 340,000 barrels for the week ending October 16 versus the prior week’s decline of 8.56 million barrels.

In the auction space, the U.S. Treasury is set to issue $75 billion in 17-week bills and $13 billion in 20-year bonds.

The Bloomberg 30-day visible supply rose $2.007 billion to $21.101 billion on Tuesday, compared to the 12-month average of $15.692 billion.

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