Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Friday as shutdown fears eased following Senate Democratic leader Chuck Schumer changing course and deciding not to block the continuing resolution bill. Investors are also looking forward to today’s preliminary March reading of consumer sentiment from the University of Michigan and looking ahead to next week’s Federal Reserve (Fed) policy meeting. As of 6:49 AM ET, the yield on the 10-year note is rising three basis points (0.03%) to 4.30%, while the 30-year bond yield is also increasing three basis points (0.03%) to 4.62%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up one basis point (0.01%) to 3.97%.

Treasury yields were lower on Thursday as the February Producer Price Index eased more than expected to a 3.2% year-over-year (YOY) increase from last month’s upwardly revised 3.7%. Both initial jobless claims and continuing claims fell. The yield on the 10-year note was down four basis points (0.04%) to 4.27%, while the 30-year bond yield also fell four basis points (0.04%) to 4.59%. The yield on the two-year note decreased three basis points (0.03%) to 3.96%.

On the data front, the University of Michigan’s preliminary March reading of consumer sentiment is forecasted to come in at 63.0, lower than the prior month’s 64.7. The one and 5-10 year inflation expectations for March from the University of Michigan are expected to come in at 4.30% and 3.40%, respectively, compared to the prior month’s 4.30% and 3.50%, respectively.

Mortgage rates were higher in the latest week. For the week ending March 13, the average 30-year fixed mortgage rate was up two basis points (0.02%) to 6.65%, versus 6.74% a year ago. The 15-year fixed mortgage rate increased one basis point (0.01%) to 5.80%, versus 6.16% a year ago.

None at this time.

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