Bond Market Commentary

Over in bond land, Treasury yields are lower before the opening bell Monday ahead of today’s data on retail sales, the New York manufacturing sector, and a gauge of homebuilder sentiment. Investors are also looking ahead to the Federal Open Market Committee’s meeting concluding Wednesday where no change in the policy rate is expected, but the updated Summary of Economic Projections will be parsed for potential future moves. As of 6:50 AM ET, the yield on the 10-year note is decreasing two basis points (0.02%) to 4.29%, while the 30-year bond yield is also falling two basis points (0.02%) to 4.60%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down one basis point (0.01%) to 4.01%.

Treasury yields were higher on Friday as the preliminary reading of March consumer sentiment from the University of Michigan fell significantly more than expected following another increase in one-year inflation expectations, which are now at the highest level since 2022. The yield on the 10-year note was up four basis points (0.04%) to 4.31%, while the 30-year bond yield rose three basis points (0.03%) to 4.62%. The yield on the two-year note increased six basis points (0.06%) to 4.02%.

On the data front, the Federal Reserve (Fed) Bank of New York will release March’s Empire State Manufacturing Survey, with the headline general business conditions index expected to come in at negative 2.0 from the prior month’s positive 5.2. Retail sales are expected to have increased 0.6% month-over-month (MOM) in February versus the prior month’s weather-related 0.9% decline. Business inventories are expected to have increased 0.3% MOM in January, versus the prior month’s 0.2% decrease. The National Association of Home Builders’ Housing Market Index is forecasted to remain unchanged in March from the prior reading of 42.0.

In the auction space, the U.S. Treasury is set to issue $76 billion in 13-week bills and $68 billion in 26-week bills.

Mortgage rates were higher in the latest week. For the week ending March 13, the average 30-year fixed mortgage rate was up two basis points (0.02%) to 6.65%, versus 6.74% a year ago. The 15-year fixed mortgage rate increased one basis point (0.01%) to 5.80%, versus 6.16% a year ago.

None at this time.

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