Bond Market Commentary

Over in bond land, Treasury yields are mixed before the opening bell Tuesday ahead of a slew of Federal Reserve (Fed) speakers scheduled for today. As of 6:47 AM ET, the yield on the 10-year note is unchanged at 4.45%, while the 30-year bond yield is increasing three basis points (0.03%) to 4.93%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down three basis points (0.03%) to 3.95%.

Treasury yields were lower on Monday as markets reacted to Moody’s late-Friday downgrade of the U.S. credit rating from Aaa to Aa1. Investors also reacted to several Fed speakers who suggested further policy rate cuts may not occur for several more meetings as central bankers await additional clarity and data on the economy. Meanwhile, the leading index declined as expected, falling 1.0%. The yield on the 10-year note was down three basis points (0.03%) to 4.45%, while the 30-year bond yield fell four basis points (0.04%) to 4.90%. The yield on the two-year note decreased two basis points (0.02%) to 3.98%.

On the data front, the Philadelphia Fed’s Non-Manufacturing Business Outlook Survey for May will be released today.

In the auction space, the U.S. Treasury is set to issue $70 billion in six-week bills.

In the central bank space, Fed Governor Adriana Kugler, Richmond Fed President Tom Barkin, Atlanta Fed President Raphael Bostic, Boston Fed President Susan Collins, St. Louis Fed President Alberto Musalem, San Francisco Fed President Mary Daly, and Cleveland Fed President Beth Hammack are scheduled to speak today as the Atlanta Fed’s Financial Markets Conference continues.

The Bloomberg 30-day visible supply rose $1.869 billion to $18.180 billion on Monday, compared to the 12-month average of $13.192 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.