Bond Market Commentary

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

January 16, 2019

Tuesday's Action

Treasury finished slightly weaker Tuesday as U.S. equity markets posted modest gains. The yield on the benchmark 10-year note inched up one basis point to 2.71%. Analysts cited a strong corporate debt supply and higher oil prices as the main catalysts for the rise in Treasury yields. In geopolitical news, as expected Theresa May’s proposed “Brexit” plan was rejected by parliament. Even with the defeat, market participants remain optimistic that the U.K. and the EU will agree on “divorce” plan. On the short end of the curve, the yield on the two-year note was unchanged at 2.53%. On the long end of the curve, the yield on the 30-year bond climbed two basis points to 3.07%, the highest level in over four weeks. In central bank news, Minneapolis Fed President Neel Kashkari stated he sees no need to raise rates with inflation remaining subdued.

Municipal Market Commentary

Tax-exempt new issue supply is expected to total $5.4 billion during the week of January 14, compared to $6.6 billion the previous week and the 2018 weekly average of $5.5 billion. The Bloomberg 30-day visible supply rose $986 million to $10.382 billion on Tuesday above the 12-month average of $8.932 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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