Bond Market Update

Data Recon

• Existing home sales increased 0.2% month-over-month in April to a seasonally adjusted annual rate of 4.02 million (Briefing.com consensus: 4.05 million) from an upwardly revised 4.01 million (from 3.98 million) in March. Sales were unchanged on a year-over-year basis.
  • The key takeaway from the report is that affordability conditions improved, with mortgage rates lower than a year ago and average income gains exceeding home price gains, yet overall sales activity remained tepid. The exact reason why is hard to pinpoint. A range of factors could be pertinent, from tight supply and not being able to find the right home to a bet that mortgage rates will come down more or to fraying confidence in job security.
• Yield Check:
  • 2-yr: +3 bps to 3.92%
  • 3-yr: +3 bps to 3.95%
  • 5-yr: +3 bps to 4.04%
  • 10-yr: +3 bps to 4.39%
  • 30-yr: +2 bps to 4.97%