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Bond Market Commentary

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

March 31, 2023

Over in bond land, Treasuries are little changed ahead of the opening bell Friday as investors await today’s key inflation data. Today’s data may provide hints to whether the economy is cooling and if inflationary pressures are easing. The yield on the benchmark 10-year note is unchanged at 3.55%, while the 30-year bond yield is down one basis point (0.01%) to 3.73%. The yield on two-year note is increasing four basis points (0.04%) to 4.15%. On Thursday, Treasuries finished mixed as investors bet the worst of the banking turmoil is over. The yield on the benchmark 10-year note dropped two basis points (0.02%) to 3.55%, while the 30-year bond yield declined three basis points (0.03%) to 3.74%. The yield on the two-year note added two basis points (0.02%) to 4.11% as it heads for its biggest monthly drop since 2008.

On the data front, February’s personal spending and personal income are forecasted to slightly ease to a 0.3% and 0.2% growth, respectively, down from the prior month’s 1.8% and 0.6% respective increases. Meanwhile, February’s Personal Consumption Expenditures (PCE) Deflator is estimated to increase 0.3% month-over-month and 5.1% year-over-year as both readings ease from prior prints. The PCE Core Deflator, which excludes the volatile food and energy, is expected to tick 0.2% lower from January’s 0.6% reading while the yearly reading is estimated to remain unchanged at 4.7%. Rounding out today’s docket, market participants can expect March’s finalized University of Michigan’s Consumer Sentiment Index readings. In the central bank space, New York Federal Reserve (Fed) President John Williams, Fed Governor Lisa Cook, and Fed Governor Christopher Waller are slated to speak throughout the day.

Mortgage rates declined for the third consecutive week ending March 30 amid heightened uncertainty within the market. Despite the uncertainty, the declining rates have boosted homebuyer demand. The average 30-year fixed-rate mortgage shed ten basis points (0.10%) to 6.22% versus 4.67% a year ago and compared to a record low of 2.65% set in January 2021. The 15-year fixed rate also notched its lowest level in six weeks. The 15-year rate fell twelve basis points (0.12%) to 5.56%, in contrast to the 3.83% level at this time last year.

Municipal Market Commentary

The Bloomberg 30-day visible supply rose $2.839 billion to $10.255 billion on Thursday, above the 12-month average of $8.741 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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