Treasury Yields Tick Higher as Market Watches

​In a relatively slow week for economic news, retail sales reversed a downward trend and home buyers began shopping as weather improved. Yet, the markets paid close attention to the yield of the 10-year Treasury and its approach to 3%. 

• Better weather contributed to a rise in mortgage application volume, according to the Mortgage Bankers Association (MBA). The MBA’s Weekly Mortgage Applications Survey showed an uptick of 4.9% (seasonally adjusted for the week ended April 13th) from the previous week in its market composite index, a measure of general mortgage loan application volume. Mike Fratantoni, the MBA’s chief economist, noted, “Home purchase applications strengthened both on a week-to-week and year-over-year basis, following a two-week slowdown driven in part by late season winter weather and the Easter holiday.”

• The 10-year Treasury yield, at 2.96%, hit its highest level since January 10th, 2014, on Friday. The yield approaching 3%, an arbitrary level, has garnered significant attention from the media and financial markets.

• The amount of retail space closing is set to hit an all-time high in 2018, according to data provided by CoStar Group. After retailers such as Toys “R” Us and Bon-Ton announced liquidation events, the amount of retail space set to close in 2018 has already hit 94 million square feet. For comparison, 105 million square feet of space closed in 2017.
  

• Retail sales reversed a three-month decline on the back of auto sales. According to the Commerce Department, retail sales increased 0.6% last month (4.5% year over year) after an un-revised 0.1% dip in February. Auto sales jumped 2%, the most in six months, while sales fell at home & garden stores, apparel stores, and sporting goods stores.