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Bond Market Commentary

Updates on bond market data, news, and activity each day.

February 29, 2024

Over in bond land, Treasury yields are higher before the opening bell Thursday ahead of January’s Personal Consumption Expenditures (PCE) deflator, personal income, and personal spending data releases. The yield on the 10-year note is rising five basis points (0.05%) to 4.31%, while the 30-year bond yield is increasing four basis points (0.04%) to 4.44%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up four basis points (0.04%) to 4.68%.

Treasury yields were lower on Wednesday, as investors evaluated the second readings for the fourth quarter’s Gross Domestic Product (GDP) and core PCE Price Index. The former was revised slightly lower, while the latter was revised slightly higher. The yield on the 10-year note was down four basis points (0.04%) to 4.26%, while the 30-year bond yield fell three basis points (0.03%) to 4.40%. The yield on the two-year note decreased five basis points (0.05%) to 4.64%.

On the data front today, initial jobless claims for the week ending February 24 are expected to be 210,000, higher than the prior week’s 201,000, while continuing claims for the week ending February 17 are projected to register 1.87 million versus the prior week’s 1.86 million. Personal income is projected to rise 0.4% in January, versus the prior month’s increase of 0.3%, while January’s personal spending is expected to rise 0.2% versus the prior month’s 0.7%. January’s PCE deflator is anticipated to increase 0.3% month-over-month (MoM), versus the previous month’s rise of 0.2%, and increase 2.4% year-over-year (YoY), lower than prior month’s increase of 2.6%. Meanwhile, January’s PCE core deflator, which excludes the more volatile energy and food components, is projected to rise 0.4% MoM, versus the prior month’s change of 0.2%, and rise 2.8% YoY versus the prior month’s increase of 2.9%. January’s pending home sales are projected to increase 1.5% MoM, versus previous month’s increase of 8.3%, and fall 4.4% YoY versus the prior month’s decline of 1.0%. The Market News International (MNI) Chicago Purchasing Managers’ Index (PMI) is expected to register 48.0 for February, higher than the prior month’s 46.0.

In the auction space, the U.S. Treasury is set to issue $95 billion in 4-week bills and $90 billion in 8-week bills.

In the central bank space, multiple Federal Reserve (Fed) speakers are scheduled to speak today about the economic outlook, monetary policy, state of the banking industry, financial stability, and regulation.

Municipal Market Commentary

The Bloomberg 30-day visible supply rose $93 million to $9.564 billion on Wednesday, above the 12-month average of $9.189 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.

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