US yields are lower to start a trading week. Reviewing last week’s changes:

2-year yield fell -13.4 basis points to 3.920%
5-year yield fell -10.9 basis points to 3.650%
10-year yield fell -8.3 basis points to 3.801%
30-year yield fell -4 point basis points to 4.092%

The yields to start the trading week are showing:

2-year yield 3.889%, -3.1 basis points
5-year yield 3.628%, -2.2 basis points
10-year yield 3.788%, -1.3 basis points
30-year yield 4.086%, -0.6 basis points

The 2-10 year spread is down to -10.1 basis points. Recall that spread did reach into positive terrritorty briefly on August 5th, but moved back to -20 basis points at the start of last week.

The 2-30 year spread is at +19.7 basis points after reaching down to +5.1 basis points last week.

Lower US yields tend to be a negative for the USD (as long as the foreign rates are not falling sharply).

Lower yields are helpful to the US housing market, and in particular 1st time home buyers who have been priced out of the market due to higher rates and high prices. The US mortgage rates tend to be tied to the 10 year yield although the spread can vary.

The average rate on a 30-year mortgage has decreased to 6.46%, the lowest level in 15 months, providing some relief to homebuyers in a challenging housing market. This marks a slight drop from last week’s 6.49% and is significantly lower than the 7.23% rate seen a year ago. The current rate is the lowest since mid-May of the previous year, when it was 6.39%.

Additionally, rates for 15-year fixed-rate mortgages have also declined, with the average falling to 5.62% from 5.66% last week. This drop is encouraging for homeowners looking to refinance at a lower rate, as the average rate was 6.55% a year ago.The high mortgage rate reached 7.8% on October 25, 2023.