Treasury yields were trading mixed on Friday, as fixed-income traders return from a bond market closure Thursday in observance of the Veterans Day holiday, after a surge in yields for the 2-year and 10-year Treasurys this week in the wake of U.S. October inflation data
What are yields doing?
-
The 10-year Treasury note yields
TMUBMUSD10Y,
1.552%
1.567%, up from 1.558% on Wednesday at 3 p.m. Eastern Time. -
The 2-year Treasury note rate
TMUBMUSD02Y,
0.523%
was at 0.528%, compared with 0.503%. -
The 30-year Treasury bond
TMUBMUSD30Y,
1.917%
yields 1.913%, edging slightly lower from 1.917% on Wednesday. - For the week, the 10-year Treasury has gained 11.6 basis points, the 2-year Treasury note rate has climbed 12.9 basis points, while the 30-year bond yield was up 2.8 basis points.
What’s driving the market?
Evidence of a persistent rise in U.S. inflation and worries that the Federal Reserve will need to act faster to tackle pricing pressures has been a driver for Treasury debt moves.
The October headline consumer-price index came in at a nearly 31-year high, with the pace of inflation over the past year rising to 6.2% in October from 5.4% in the prior month. That is more than double the Federal Reserve’s 2% target.
The moves for yields also have come after the Fed last week announced, as expected, its plan to reduce monthly purchases of Treasurys and mortgage-backed securities which started last year to help prop up the hobbled U.S. economy during the pandemic but are viewed as no longer needed.
Looking ahead, investors might watch the University of Michigan’s November consumer sentiment report, which is slated to be released at 10 a.m. ET. At the same time, a report on job openings, JOLTs, will be released at the same time.
What strategists are saying
“We still believe that tapering will trigger an increase in real yields eventually but that this will be gradual and moderate,” wrote analysts at UniCredit in a Friday research report.
This post was originally published on Market Watch
