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Bond Market Commentary

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

October 22, 2020

Wednesday's Action

Treasuries declined on Wednesday, as investors continued to monitor fiscal stimulus. House Speaker Nancy Pelosi said there is “a prospect for an agreement,” although the bill may not reach both chambers of Congress until after the November 3 election. Still, speculation for a larger deal pushed the yield on the 10-year note higher by two basis points to 0.81%, above the 0.80% mark for the first time since June. The yield on the 30-year bond rose two basis points to 1.62%, while the yield on the two-year note held steady at 0.15%. On the auction front, the U.S. Treasury sold $22 billion 20-year notes at a high yield of 1.370% to solid demand. The bid-to-cover ratio came in at 2.43, the highest since July and above the prior 2.39 figure. Elsewhere, the Federal Reserve’s Beige Book showed the U.S. economy continued to recovery at a “slight to modest” pace. Officials noted that the economic picture varied across different sectors, with the housing market remaining a particular bright spot, and commercial real estate remaining poor.

Municipal Market Commentary

Tax-exempt new issue supply is expected to total $11.2 billion during the week of October 19th, compared to the 2020 weekly average of $6.1 billion. The Bloomberg 30-day visible supply fell $2.491 billion to $24.276 billion on Wednesday, above the 12-month average of $15.099 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.

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