Bond Market Commentary

Over in bond land, Treasury yields are mostly unchanged before the opening bell Thursday ahead of today’s fresh economic data, including updates on initial and continuing jobless claims. As of 6:48 AM ET, the yield on the 10-year note is unchanged at 4.53%, while the 30-year bond yield is also unchanged at 4.77%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down one basis point (0.01%) to 4.26%.

Treasury yields were mostly lower on Wednesday following the minutes for the Federal Reserve’s (Fed’s) January 29 meeting illustrating that so long as the labor market holds up, they would want to see further progress on disinflation before making additional rate cuts. Meanwhile, housing market data was mostly negative, with mortgage applications falling, housing starts slowing more than expected, and building permits rising slightly. The yield on the 10-year note was down two basis points (0.02%) to 4.53%, while the 30-year bond yield was unchanged at 4.77%. The yield on the two-year note decreased four basis points (0.04%) to 4.27%.

On the data front, initial jobless claims for the week ending February 15 are expected to come in at 215,000, slightly higher than the prior week’s 213,000, while continuing jobless claims for the week ending February 8 are projected to come in at 1.87 million, higher than the prior week’s 1.85 million. The Philadelphia Fed will release their February Manufacturing Business Outlook Survey, with the diffusion index of current general activity forecasted to fall to 14.3 from the prior month’s 44.3. The Leading Index for January is forecasted to show a decline of 0.1%, similar to the prior month’s change. The Department of Energy’s measure of crude oil inventories is expected to show an increase of 3.00 million barrels for the week ending February 14, compared to the prior week’s increase of 4.07 million barrels.

In the auction space, the U.S. Treasury is set to issue $85 billion in four-week bills, $80 billion in eight-week bills, and $9 billion in 30-year Treasury Inflation-Protected Securities.

In the central bank space, Fed Vice Chair for Supervision Michael Barr, Fed Governor Adriana Kugler, Chicago Fed President Austan Goolsbee, and St. Louis Fed President Alberto Musalem are scheduled to speak today.

The Bloomberg 30-day visible supply rose $4.669 billion to $14.207 billion on Wednesday, compared to the 12-month average of $12.006 billion.

This information is obtained from sources and data considered to be reliable, but its accuracy and completeness is not guaranteed by Wells Fargo Advisors. Additional information available by request.

Wells Fargo Advisors is registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered with any financial services regulatory authority outside of the U.S. Non-U.S. residents who maintain U.S.-based financial services account(s) with Wells Fargo Advisors may not be afforded certain protections conferred by legislation and regulations in their country of residence in respect of any investments, investment transactions or communications made with Wells Fargo Advisors.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.