October 11, 2024
Over in bond land, Treasury yields are higher before the opening bell Friday ahead of the release of September Producer Price Index (PPI) data and the University of Michigan’s preliminary October consumer sentiment reading. As of 6:45 AM ET, the yield on the 10-year note is rising two basis points (0.02%) to 4.09%, while the 30-year bond yield is also increasing two basis points (0.02%) to 4.39%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up one basis point (0.01%) to 3.98%.
Treasury yields were mixed on Thursday as the September Consumer Price Index (CPI) report came in hotter-than-expected and jobless claims increased more than forecasted. Headline CPI growth eased slightly less than projections to 2.4% year-over-year (YOY), while the core measure, which excludes the more volatile food and energy components, unexpectedly accelerated to 3.2% YOY. Initial jobless claims rose to 258,000, 33,000 higher than the prior week, while continuing claims rose to 1.86 million. The yield on the 10-year note was up one basis point (0.01%) to 4.07%, while the 30-year bond yield rose three basis points (0.03%) to 4.37%. The yield on the two-year note decreased four basis points (0.04%) to 3.97%.
On the data front today, the headline PPI for September is expected to have risen 0.1% month-over-month (MOM) and 1.6% YOY, slowing from last month’s paces of 0.2% and 1.7%, respectively. Meanwhile, core PPI is expected to have increased 0.2% MOM and 2.6% YOY, down from the prior month’s 0.3% and up from the prior month’s 2.4%, respectively. The preliminary October reading for University of Michigan’s Consumer Sentiment Index is expected to come in at 71.0, up from the prior month’s 70.1. Meanwhile, the University of Michigan’s preliminary October readings for one-year and 5-10-year inflation expectations are forecasted to come in at 2.7% and 3.0%, respectively, roughly unchanged and down from the prior month’s 3.1%, respectively.
In the central bank space, Chicago Federal Reserve (Fed) President Austan Goolsbee, Dallas Fed President Lorie Logan, and Fed Governor Michelle Bowman are all scheduled to speak today.
Mortgage rates were higher in the latest week. For the week ending October 10, the average 30-year fixed mortgage rate was up 20 basis points (0.20%) to 6.32%, versus 7.57% a year ago. The 15-year fixed mortgage rate increased 16 basis points (0.16%) to 5.41%, versus 6.89% a year ago.
Municipal Market Commentary
The Bloomberg 30-day visible supply fell $385 million to $13.968 billion on Thursday.
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