BOND REPORT: 2-year Treasury Yield Notches New Decade High As Investors Eye Tax Bill
November 20 2017 - 4:32PM
Dow Jones News
By Sunny Oh
2-year Treasury yield rise to 1.754%
Treasury prices fell, pushing up yields on Monday, as the White
House signaled its willingness to let lawmakers drop a
controversial provision from Senate tax legislation if it would
enhance prospects for passage.
What are yields doing?
The 2-year Treasury yield rose 2.6 basis points to 1.754%, the
highest since Oct. 14, 2008. The shorter maturity note extended its
relentless climb, rising for the eighth day during the past 10
trading sessions.
The benchmark 10-year note yield rose 1.8 basis point to 2.370%.
While, the 30-year bond yield was unchanged at 2.789%.
Bond prices move in the opposite direction of yields.
What's driving markets?
The White House said it would support removing Obamacare repeal
language from the bill if necessary for passage after Sen. Susan
Collins, a Maine Republican, said she had doubts about the measure
(http://www.marketwatch.com/story/republican-collins-still-undecided-on-tax-bill-says-it-needs-changes-2017-11-19).
The Republicans can only afford a few dissenters as Republicans
only have a small majority in the Senate and the Democrats are
expected to vote against the tax plan.
See: Obamacare mandate repeal may not be blow supporters fear
(http://www.marketwatch.com/story/obamacare-mandate-repeal-may-not-be-blow-supporters-fear-mueller-interviews-with-white-house-officials-coming-up-2017-11-20)
Read: Future retirees will end up paying for tax cuts
(http://www.marketwatch.com/story/why-cut-taxes-in-the-face-of-rising-deficits-2017-11-20)
With little economic data ahead of the release of the Federal
Open Market Committee's minutes on Wednesday, investors eyed the
geopolitical strains in Germany. Chancellor Angela Merkel was
unable to form a majority coalition government, and said she would
prefer a general election over the prospect of a minority
government.
Check out: Here's what Germany's political turmoil means for
global markets
(http://www.marketwatch.com/story/heres-what-germanys-political-turmoil-means-for-global-markets-2017-11-20)
What did market participants say?
"Ultimately, if the opposition to the [tax bill] increases,
removing the ACA individual mandate repeal and scaling down some of
the tax cuts should appease both sides and still beat the
alternative of 'new deal'," wrote credit strategists at Deustche
Bank.
What else is on investors' radar?
What other markets moved?
European bond yields were lower across the board. The French
10-year government bond shed 1.5 basis point to 0.698%, while the
German 10-year government bond yield was unchanged in 0.360%.
(END) Dow Jones Newswires
November 20, 2017 16:17 ET (21:17 GMT)
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