July 26, 2024
Over in bond land, Treasury yields are mostly unchanged before the opening bell Friday ahead of key economic data including June’s personal income, personal spending, and Personal Consumption Expenditures (PCE) deflator. The yield on the 10-year note is unchanged at 4.24%, while the 30-year bond yield is increasing one basis point (0.01%) to 4.49%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is unchanged at 4.43%.
Treasury yields were mostly lower on Thursday, as investors evaluated the second quarter’s Gross Domestic Product (GDP), which increased at a 2.8% annualized pace - above the 2.0% forecast, and the second quarter’s core PCE Price Index, which advanced 2.9% - above the consensus estimate of 2.7%. The yield on the 10-year note was down four basis points (0.04%) to 4.24%, while the 30-year bond yield fell six basis points (0.06%) to 4.48%. The yield on the two-year note was unchanged at 4.43%.
On the data front today, personal income is projected to rise 0.4% in June, versus the prior month’s increase of 0.5%, while June’s personal spending is expected to rise 0.3% versus the prior month’s 0.2%. June’s PCE deflator is expected to rise 0.1% month over month (MOM) from the prior month’s flatline and decelerate to 2.4% year over year (YOY) from the prior month’s 2.6%, while the core PCE deflator is expected to show price increases of 0.2% MOM and 2.5% YOY, versus the prior month’s 0.1% and 2.6%, respectively. The final reading of the University of Michigan Consumer Sentiment Index is expected to record 66.4 for July, up slightly from the prior reading of 66.0. Meanwhile, July’s final readings for the University of Michigan’s one- and 5-10-year inflation expectations are both forecasted at 2.9%, both unchanged from the prior reading.
Mortgage rates were higher in the latest week. For the week ending July 25, the average 30-year fixed mortgage rate was up one basis point (0.01%) to 6.78%, versus 6.81% a year ago. The 15-year fixed mortgage rate increased two basis points (0.02%) to 6.07%, versus 6.11% a year ago.
Municipal Market Commentary
The Bloomberg 30-day visible supply fell $1.233 billion to $11.306 billion on Thursday, above the 12-month average of $9.618 billion.
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