Bond Market Commentary

Over in bond land, Treasury yields are unchanged before the opening bell Wednesday as investors are anticipating August’s trade balance data and the release of minutes from the Federal Open Market Committee’s October 29 meeting. As of 6:56 AM ET, the yield on the 10-year note is unchanged at 4.11%, while the 30-year bond yield is also unchanged at 4.73%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is unchanged at 3.57%.

Treasury yields were lower on Tuesday as homebuilder sentiment rose in November and August’s factory orders and increased in line with expectations. The yield on the 10-year note was down three basis points (0.03%) to 4.11%, while the 30-year bond yield fell one basis point (0.01%) to 4.73%. The yield on the two-year note decreased four basis points (0.04%) to 3.57%.

On the data front, the Mortgage Bankers Association’s gauge of mortgage applications decreased by 5.2% for the week ending November 14 versus the prior week’s increase of 0.6%. The U.S. trade deficit for August is expected to shrink to $60.4 billion from the prior month’s $78.3 billion. The Department of Energy’s measure of crude oil inventories is expected to have decreased by 1.70 million barrels for the week ending November 14 versus the prior week’s increase of 6.41 million barrels.

In the auction space, the U.S. Treasury is set to issue $69 billion in 17-week bills and $16 billion in 20-year bonds.

In the central bank space, Federal Reserve (Fed) Governor Stephen Miran, Richmond Fed President Tom Barkin, and New York Fed President John Williams are scheduled to speak today.

The Bloomberg 30-day visible supply rose $3.630 billion to $14.893 billion on Tuesday, above the 12-month average of $13.838 billion.

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