Bond Market Commentary

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

October 18, 2018

Wednesday's Action

Treasuries weakened along the curve Wednesday as investors digested the newly released minutes from the FOMC’s most recent policy meeting. In the release, Fed officials unanimously approved the September interest rate increase and stated that gradual hikes to the borrowing rate remain appropriate given the current economic conditions. The yield on the 10-year note which traded as low as 3.15% in early trading, climbed in afternoon trading and finished up three basis points to 3.19%. On the data front, a report showed housing starts fell 5.3% in September, well below August’s upwardly revised 7.1% increase. An additional update revealed mortgage applications in the most recent week dipped to the lowest level since December 2014. On the short end of the curve, the yield on the two-year bond advanced two basis points to 2.89%.

Municipal Market Commentary

Tax-exempt new issue supply is expected to total $10.2 billion during the week of October 15, up from $4.3 billion the prior week and above the 2018 weekly average of $5.6 billion. The Bloomberg 30-day visible supply fell $1.820 billion to $13.101 billion on Wednesday, above the 12-month average of $10.3 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.

Wells Fargo Investment Institute, Inc., is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.