Bond Market Commentary
Updates on bond market data, news, and activity each day.
Treasuries are up along the curve pulling yields down after a soft seven-year auction concluded the $258 billion debt issuance this week. The yield on the benchmark 10-year note is down two basis points to 2.92% while the yield on the 30-year bond fell two basis points to 3.20%. On the short end of the curve, the two-year note yield declined two basis points to 2.25%. Investors turned their attention to speeches from the Fed’s Regional Presidents. Atlanta Fed President Raphael Bostic, a voting member, said that things are continuing to look up and the Fed is “in an increasing-rate environment, and are in the midst of a carefully-calibrated return to a more normal Fed footing”. Meanwhile, St. Louis Fed President James Bullard, a non-voting member, warned that an aggressive monetary policy would dampen the economy and that 100-basis point hike in rates in 2018 seems too high. Friday brings another slew of Fed speakers that will garner attention on a quiet day for economic releases.
Mortgage rates increased for a seventh consecutive week, according to Freddie Mac Primary Market Mortgage Survey® (PMMS®). For the period ending Feb 22nd, the 30-year fixed rate mortgage advanced two basis points to 4.40% at its highest since April of 2014. This compares to 4.16% a year ago. The 15-year fixed rate mortgage also trended upward, rising one basis points to 3.85% and compares to 3.37% this time last year. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.65%, up two basis points from a week ago and compares to 3.16% last year.
Municipal Market Commentary
Thursday, municipal market indices showed that muni bonds were unchanged. As reported on February 14, U.S. municipal bond funds posted net outflows of $443.4 million compared with $674.9 million of net inflows the prior week, according to Lipper FMI. The Bloomberg 30-day visible supply rose $581 million to $9.901 billion on Thursday, below the 12-month average of $11.405 billion. The total is comprised of $2.169 billion of competitive bonds and $7.732 billion of negotiated bonds.
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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