Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Wednesday ahead of today’s fresh Federal Reserve (Fed) commentary and as investors look forward to Friday’s November Purchasing Managers’ Index data. As of 6:50 AM ET, the yield on the 10-year note is rising two basis points (0.02%) to 4.42%, while the 30-year bond yield is increasing three basis points (0.03%) to 4.61%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up two basis points (0.02%) to 4.30%.

Treasury yields were mostly lower on Tuesday as the latest housing data came in weaker than projected, with October’s housing starts declining more than forecasts while the month’s building permits unexpectedly fell. The yield on the 10-year note was down one basis point (0.01%) to 4.40%, while the 30-year bond yield fell three basis points (0.03%) to 4.58%. The yield on the two-year note was unchanged at 4.28%.

On the data front, the Mortgage Bankers Association’s gauge of mortgage applications rose 1.7% for the week ending November 15 versus the prior week’s increase of 0.5%. The Department of Energy’s measure of crude oil inventories is expected to have decreased by 85,000 barrels for the week ending November 15 versus the prior week’s increase of 2.1 million barrels.

In the central bank space, Fed Vice Chair for Supervision Michael Barr, Fed Governor Lisa Cook, Fed Governor Michelle Bowman, and Boston Fed President Susan Collins are all scheduled to speak today.

In the auction space, the U.S. Treasury is set to issue $64 billion in 17-week bills, and $16 billion in 20-year bonds.

None at this time.

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