Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Thursday ahead of tomorrow’s trading market closure for Good Friday and as investors are looking forward to today’s economic releases, including unemployment claims and housing market data. As of 6:51 AM ET, the yield on the 10-year note is rising two basis points (0.02%) to 4.30%, while the 30-year bond yield is increasing three basis points (0.03%) to 4.77%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up two basis points (0.02%) to 3.79%.

Treasury yields were lower on Wednesday as retail sales for March rose in line with expectations while industrial production recorded a sharper-than-anticipated decline. Federal Reserve (Fed) Chair Jerome Powell highlighted inflation risks from tariffs and stated, “our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem.” The yield on the 10-year note was down five basis points (0.05%) to 4.28%, while the 30-year bond yield fell four basis points (0.04%) to 4.74%. The yield on the two-year note decreased seven basis points (0.07%) to 3.77%.

On the data front, housing starts are expected to have been an annualized 1.42 million in March versus the prior month’s 1.50 million, corresponding to a month-over-month (MOM) decline of 5.4% versus the prior month’s increase of 11.2%. The preliminary reading of March building permits is expected to come in at an annualized 1.45 million versus the prior month’s 1.46 million, corresponding to a MOM decline of 0.6% versus the prior month’s decline of 1.0%. Initial jobless claims for the week ending April 12 are expected to come in at 225,000, slightly higher than the prior week’s 223,000, while continuing jobless claims for the week ending April 5 are projected to come in at 1.87 million, higher than the prior week’s 1.85 million. The Philadelphia Fed will release their April Manufacturing Business Outlook Survey, with the diffusion index of current general activity forecasted to fall to 2.2 from the prior month’s 12.5.

In the auction space, the U.S. Treasury is set to issue $85 billion in four-week bills, $75 billion in eight-week bills, and $25 billion in five-year Treasury Inflation-Protected Securities.

In the central bank space, Fed Governor Michael Barr is scheduled to speak today.

The Bloomberg 30-day visible supply rose $2.224 billion to $20.649 billion on Wednesday, compared to the 12-month average of $12.666 billion.

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