Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Monday ahead of the release of March’s retail sales and April’s National Association of Home Builders (NAHB) Housing Market Index data. The yield on the 10-year note is rising five basis points (0.05%) to 4.57%, while the 30-year bond yield is increasing four basis points (0.04%) to 4.67%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up four basis points (0.04%) to 4.94%.

Treasury yields were lower on Friday, following the University of Michigan Consumer Sentiment Index coming in lower than projections, while short-and-intermediate-term inflation expectations unexpectedly rose. March’s import prices increased slightly more than expectations. The yield on the 10-year note was down seven basis points (0.07%) to 4.52%, while the 30-year bond yield fell five basis points (0.05%) to 4.63%. The yield on the two-year note decreased six basis points (0.06%) to 4.90%.

On the data front today, the NAHB Housing Market Index is forecasted to post a level of 51 in April, unchanged from March’s reading. March’s retail sales are expected to increase 0.4% month-over-month (MoM) versus the prior month’s increase of 0.6%, while March’s retail sales excluding autos is projected to rise 0.5% MoM versus the prior month’s increase of 0.3%. The Empire State Manufacturing Survey headline general business conditions index is expected to record a negative 5.0 for April versus the prior month’s negative 20.9.

In the auction space, the U.S. Treasury is set to issue $70 billion in 13-week bills and $70 billion in 26-week bills.

In the central bank space, multiple Federal Reserve presidents are scheduled to speak today.

Mortgage rates were higher in the latest week. For the week ending April 11, the average 30-year fixed mortgage rate was up six basis points (0.06%) at 6.88%, versus 6.27% a year ago. The 15-year fixed mortgage rate increased 10 basis points (0.10%) to 6.16%, versus 5.54% a year ago.

The Bloomberg 30-day visible supply fell $1.696 billion to $10.145 billion on Friday, above the 12-month average of $9.133 billion.

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