Home Stock Yields on US government bonds rose higher on Monday after the auction

Yields on US government bonds rose higher on Monday after the auction


U.S. Treasury yields rose on Monday as investors announced a series of auctions, including the sale of 3-year and 10-year treasury bonds, a portion of the nearly $ 270 billion in debt. On sale this week in what is arguably the most recent appetite test for the jewels.

The service comes ahead of an important inflation report, the consumer price index, to be released on Tuesday morning.

Treasures worked like?
  • Treasury bonds with 10-year term
    TMUBMUSD10Y,
    1,668%

    rallied 1 basis point to finish at 1.674%, based on the 3pm Eastern Time close.

  • 30-year treasury bonds
    TMUBMUSD30Y,
    2,338%

    has achieved 2,345%, an increase of 0.2 basis points.

  • Treasury bonds with a 2-year term
    TMUBMUSD02Y,
    0.172%

    is 0.171%, up 1.4 basis points.

Bond prices move in the opposite direction of yield.

What drove the fixed income market?

Fixed income investors have participated in a series of auctions that are expected to act as a new gauge of the likelihood of new downstream bond buyers amid nagging worries about inflationary pressure.

Three-year auction
TMUBMUSD03Y,
0.349%

and the 10-year liabilities described by market participants as mostly unstable, if not somewhat soft, while boosting yields slightly towards the short end of the curve.

The next three weeks will see the start of about $ 370 billion in US Treasury auctions.

Investors also focused on comments from Federal Reserve officials.

St. Fed President Louis James Bullard in an interview on Bloomberg Television. was described inflation as the number 1 worry in the economy, but said the picture of price pressures will be blurred for most of the year.

“We are in a period of uncertainty around inflation. Dust has to settle for a bit before we find out what real inflation is and that could happen later this year, ”Bullard said in Monday’s interview.

While, Boston Fed President Eric Rosengren say the economy may take longer to get back to normal than some had hoped.

“I expect the economy’s return to pre-pandemic levels likely to take longer than many private forecasters have predicted,” he said, adding that the current stance. at the Fed’s policy is consistent.

“With the labor market sagging and inflation still below the Federal Reserve’s 2% target, my view is the current highly interoperable monetary policy stance,” said Rosengren. is suitable, ”says Rosengren.

The central banker’s comments follow those from Fed boss Jerome Powell, in an interview on Sunday’s “60 minutes” broadcast, where he emphasizes that the Fed will not consider raising interest rates until “the labor market recovery is essentially complete” and that the country is back to maximum employment and about 2% inflation in a single time. maintenance.

“It will take a while until we fix that problem,” he said.

What did the market participants say?

“That said, as is widely expected, auctions come and go with little impact on the US exchange rate market, except perhaps the increase in yields in a socially nodding trend. head with supply, ”wrote BMO Capital Markets fixed income strategist and Ben Jeffery in a note on Monday.

“The lack of any meaningful data and the release of inflation on Tuesday give almost all the reason investors need to leave the trading day to go sideways with clearly low confidence. It is worth noting that the 10-year results did not cause any reactions in either direction, ”wrote the BMO analysts.

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