Market Commentary

Updated on April 17, 2025 10:07:21 AM EDT

Yesterday's 20-year Treasury Bond auction didn't go as well as last week's 10-year and 30-year sales did. The benchmarks of this week's auction showed an average demand from investors compared to other recent sales. Bonds showed little reaction when results were posted at 1:00 PM ET. They had already improved prior to the results announcement and moved again late in the day, but it was not due to the auction.

Fed Chairman Powell's speaking engagement in Chicago didn't give us any major surprises, basically reiterating what he said a couple of weeks ago. He repeated that the Fed is no hurry to start cutting key short-term interest rates, that they need to wait for better clarity on how President Trump's tariffs and other policies are going to affect the economy and inflation before making another move. Bonds did extend their afternoon gains slightly during and after his discussion. If you saw an afternoon improvement in rates, it likely was not solely because of his words even though what he said was enough for some lenders to make an intraday revision.

There were two early morning economic releases this morning. First was March's Housing Starts data that showed new home groundbreakings fell a larger than expected 11.4% last month to signal weakness in the new home market. Starts of single-family homes that are more relevant to residential mortgage rates declined 14.2%. As a sign of economic weakness, this data is favorable for mortgage rates. However, this particular report does not carry a high level of importance in the markets, preventing a better reaction in the bond market.

Last week's unemployment update revealed the number of new claims for jobless benefits dropped by 9,000 from the previous week's revised 224,000 initial filings. The 215,000 number fell short of the 225,000 that was predicted and shows strength in the employment sector. Therefore, we have to label the report bad news for bonds and mortgage pricing.

We have an early close in the bond market today and a full trading session for stocks. The bond market will close at 2:00 PM ET ahead of tomorrow's Good Friday holiday and will reopen Monday morning. Stocks are closed tomorrow. Don't be surprised to see a little weakness in bonds this afternoon as investors look to protect themselves from headlines over the extended weekend. If bonds lose ground this afternoon, we may see a small upward revision in rates before the end of the day.

Since there is no relevant data or other related events scheduled for tomorrow and the markets are closed, there will not be an update to this report. We would like to wish all of our readers a wonderful holiday weekend!