Bond Market Commentary

Over in bond land, Treasury yields are lower before the opening bell Tuesday following an early-morning release of national jobless claims data and ahead of today’s homebuilder sentiment and factory orders data. As of 6:55 AM ET, the yield on the 10-year note is decreasing three basis points (0.03%) to 4.11%, while the 30-year bond yield is falling two basis points (0.02%) to 4.72%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down four basis points (0.04%) to 3.57%.

Treasury yields were mostly lower on Monday as the Empire State Manufacturing Survey from the Federal Reserve (Fed) Bank of New York showed an unexpected increase in business activity in November, with the headline general business conditions index rising to 18.7. Construction spending in August unexpectedly edged higher, posting a 0.2% month-over-month (MOM) increase. The yield on the 10-year note was down one basis point (0.01%) to 4.14%, while the 30-year bond yield also fell one basis point (0.01%) to 4.74%. The yield on the two-year note was unchanged at 3.61%.

On the data front, initial jobless claims for the week ending October 18 came in at 232,000, while continuing claims came in at 1.96 million for the week ending October 18, up from the prior week’s 1.95 million. The New York Fed will release their Business Leaders Survey for November. The National Association of Home Builders’ Housing Market Index is forecasted to come in at 37 for November, unchanged from the prior month. Meanwhile, August’s factory orders are expected to have increased 1.4% MOM versus the prior month’s decrease of 1.3%. August’s finalized durable goods orders are expected to show a 2.9% MOM increase, unchanged from the prior reading. The release of October’s industrial production scheduled for today is delayed due to the lack of available data, while the October Import and Export Price Indexes are delayed due to the lack of data collection during the government shutdown.

In the auction space, the U.S. Treasury is set to issue $95 billion in six-week bills.

In the central bank space, Fed Governor Michael Barr, Richmond Fed President Tom Barkin, and Dallas Fed President Lorie Logan are scheduled to speak today.

The Bloomberg 30-day visible supply fell $741 million to $11.233 billion on Monday, below the 12-month average of $13.834 billion.

This information is obtained from sources and data considered to be reliable, but its accuracy and completeness is not guaranteed by Wells Fargo Advisors. Additional information available by request.

Wells Fargo Advisors is registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered with any financial services regulatory authority outside of the U.S. Non-U.S. residents who maintain U.S.-based financial services account(s) with Wells Fargo Advisors may not be afforded certain protections conferred by legislation and regulations in their country of residence in respect of any investments, investment transactions or communications made with Wells Fargo Advisors.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.