Bond Market Commentary

Over in bond land, Treasury yields are mixed before the opening bell Thursday as investors look forward to a flurry of economic data and central bank commentary, headlined by opening remarks from Federal Reserve (Fed) Chair Jerome Powell and the third reading of second-quarter Gross Domestic Product (GDP). As of 6:49 AM ET, the yield on the 10-year note is decreasing one basis point (0.01%) to 3.77%, while the 30-year bond yield is falling two basis points (0.02%) to 4.12%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is down one basis point (0.01%) to 3.55%.

Treasury yields were higher on Wednesday as August’s new home sales slowed less than expected from the prior month. The yield on the 10-year note was up five basis points (0.05%) to 3.78%, while the 30-year bond yield rose six basis points (0.06%) to 4.14%. The yield on the two-year note increased two basis points (0.02%) to 3.56%.

On the data front today, the third reading of second quarter GDP is expected to be revised slightly lower to an annualized quarter-over-quarter (QOQ) reading of 2.9% from the prior reading of 3.0%, while Personal Consumption, the GDP Price Index, and the Core Personal Consumption Expenditures Price Index are all expected to remain unchanged from the prior annualized QOQ readings of 2.9%, 2.5%, and 2.8%, respectively. The preliminary reading of August’s durable goods orders is expected to fall 2.7% month over month (MOM) versus July’s 9.8% growth. Initial jobless claims for the week ending September 21 are expected to increase to 223,000 from the prior week’s 219,000, while continuing claims for the week ending September 14 are expected to be roughly unchanged from the prior week’s 1.83 million. August’s pending home sales are expected to increase 1.0% MOM versus July’s 5.5% decline.

In the auction space, the U.S. Treasury is set to issue $90 billion in four-week bills, $85 billion in eight-week bills, and $44 billion in seven-year notes.

In the central bank space, many Fed members are scheduled to speak today on various topics, with the main event being Fed Chair Powell’s opening remarks at the U.S. Treasury Market Conference.

The Bloomberg 30-day visible supply fell $3.031 billion to $18.841 billion on Wednesday, above the 12-month average of $10.690 billion.

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