Bond Market Commentary

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

July 19, 2019

Thursday's Action

Treasuries strengthened Thursday, sending yields lower amid dovish comments from New York Fed President John Williams. Williams’ said policymakers need to “act quickly” when the economy is slowing to lower rates. Adding that it is important “to take preventative measures” rather than waiting for economic disaster to strike. Following the remarks, CME Group’s prediction for a 50 basis point rate cut at the July 31st central bank meeting doubled from yesterday’s 35% to 70%. The yield on the benchmark 10-year note fell two basis points to 2.03%, while the 30-year bond was flat at 2.56%. On the short end of the curve, the two-year note slid seven basis points to 1.75%. On the data front, initial jobless claims climbed to 216,000 in line with projections. A separate release showed the business outlook in the Philadelphia Fed region surged the most in a decade in June. An additional survey revealed the leading indicators index unexpectedly fell 0.3% in June, consensus estimates had called for a 0.1% gain.


Mortgage rates were little changed in the most recent week but remain near multi-year lows, according to the Freddie Mac Primary Market Mortgage Survey® (PMMS®). For the period ending July 18th 2019, the 30-year fixed rate climbed six basis points to 3.81%. This compares to 4.52% at this time last year. The 15-year fixed rate mortgage added one basis points to 3.23%, which compares to 4.00% a year ago. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.48%, up two basis point from the prior week and compares to 3.87% at this time last year.

Municipal Market Commentary

Tax-exempt new issue supply is expected to total $6.6 billion during the week of July 15, compared to $6.3 billion the previous week and the 2019 weekly average of $5.4 billion. The Bloomberg 30-day visible supply rose $447 million to $12.611 billion on Thursday, above the 12-month average of $8.998 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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