Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Friday following President Donald Trump’s announcement of a three week ceasefire extension between Israel and Lebanon. Investors are looking forward to today’s finalized April reading of consumer sentiment from the University of Michigan. As of 6:52 AM ET, the yield on the 10-year note is rising one basis point (0.01%) to 4.33%, 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 3.84%. 

Treasury yields were higher on Thursday as S&P Global’s preliminary April readings for both the manufacturing and services purchasing managers’ indexes (PMIs) increased more than anticipated to 54.0 and 51.3 respectively. Meanwhile, both initial jobless claims and continuing claims picked up. The yield on the 10-year note was up two basis points (0.02%) to 4.32%, while the 30-year bond yield rose one basis point (0.01%) to 4.91%. The yield on the two-year note increased three basis points (0.03%) to 3.83%. As of end of day Thursday (April 23), futures markets are pricing in no change in the policy rate at the Federal Reserve's (Fed’s) upcoming April meeting, with a cumulative six basis points (0.06%) worth of rate cuts by year-end 2026.

On the data front, the finalized April reading of consumer sentiment from the University of Michigan is expected to come in at 48.5 versus the initial reading of 47.6, while one-year and 5-10-year inflation expectations are expected to come in at 4.8% and 3.4%, respectively, similar to the initial readings. The Kansas City Fed will release their Services Survey for April, with the composite index expected to come in at 10, down from the prior month’s 15.

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 fell $1.407 billion to $13.612 billion on Thursday, below the 12-month average of $14.057 billion.

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