Bond Market Commentary

Over in bond land, Treasury yields are mostly higher before the opening bell Wednesday as investors look forward to the final release for March’s wholesale inventories. The yield on the 10-year note is rising two basis points (0.02%) to 4.48%, while the 30-year bond yield is also increasing two basis points (0.02%) to 4.62%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is unchanged at 4.83%.

Treasury yields were mostly lower on Tuesday, as investors digested Minneapolis Federal Reserve (Fed) President Neel Kashkari’s comments that he expects the Fed to maintain interest rates at their current level for an extended period until there is more clarity on the disinflationary situation. The yield on the 10-year note was down three basis points (0.03%) to 4.46%, while the 30-year bond yield also fell three basis points (0.03%) to 4.60%. The yield on the two-year note was unchanged at 4.83%.

On the data front today, Mortgage Bankers Association (MBA) mortgage applications increased 2.6% for the week ending May 3 versus the prior week’s decrease of 2.3%. The final reading for March’s wholesale inventories is expected to decrease 0.4% month-over-month, unchanged from the prior reading. Department of Energy (DOE) crude oil inventories for the week ending May 3 are scheduled to be released today.

In the auction space, the U.S. Treasury is set to issue $60 billion in 17-week bills and $42 billion in 10-year notes.

In the central bank space, multiple Fed speakers are scheduled to speak today.

The Bloomberg 30-day visible supply rose $2.588 billion to $15.277 billion on Tuesday, above the 12-month average of $9.133 billion.

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