Bond Market Commentary

Over in bond land, Treasury yields are mostly lower before the opening bell Tuesday as markets assess developments in the Iran war and the likelihood of deescalation. Meanwhile, investors are awaiting today’s economic releases, including March consumer confidence and February job openings. As of 6:54 AM ET, the yield on the 10-year note is decreasing two basis points (0.02%) to 4.33%, while the 30-year bond yield is falling one basis point (0.01%) to 4.90%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is unchanged at 3.83%. 

Treasury yields were lower on Monday as Federal Reserve (Fed) Chair Jerome Powell commented that the central bank does not yet need to intervene, but may need to do so depending on changes in inflation expectations. The yield on the 10-year note was down eight basis points (0.08%) to 4.35%, while the 30-year bond yield fell five basis points (0.05%) to 4.91%. The yield on the two-year note decreased eight basis points (0.08%) to 3.83%.

On the data front, the Federal Housing Finance Agency’s House Price Index is expected to rise 0.1% month-over-month (MOM) in January, similar to the prior month’s increase. The S&P Cotality Case-Shiller 20-City Home Price Index for January is expected to rise 0.35% MOM and 1.38% year-over-year, versus the prior month’s increases of 0.47% and 1.38%, respectively. The Market News International Chicago purchasing managers’ index for March is expected to come in at 55.0, down from the prior month’s 57.7. The Conference Board’s reading of March consumer confidence is projected to come in at 87.9 versus the prior month’s 91.2. The February Job Openings and Labor Turnover Survey (JOLTS) is forecasted to show job openings of 6.89 million, versus the prior month’s 6.95 million. The Dallas Fed’s Texas Service Sector Outlook Survey for March will be released, with the general business activity index expected to come in at -4.6, down from the prior month’s -3.2.

In the auction space, the U.S. Treasury is set to issue $75 billion in six-week bills.

In the central bank space, Fed Vice Chair for Supervision Michelle Bowman, Fed Governor Michael Barr, Chicago Fed President Austan Goolsbee, and Kansas City Fed President Jeffrey Schmid are scheduled to speak today.

The Bloomberg 30-day visible supply fell $4.669 billion to $11.188 billion on Monday, above the 12-month average of $14.152 billion.

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