Government Bonds Slip as Selling Continues
January 19 2018 - 11:31AM
Dow Jones News
By Gunjan Banerji
Government bonds weakened Friday, continuing a spell of selling
that has dominated the first few weeks of the year.
The yield on the benchmark 10-year Treasury note rose to 2.631%,
according to Tradeweb, from 2.611% on Thursday, when it crossed its
highest level in more than three years. Yields rise as bond prices
fall.
Government-bond yields have risen in January after being stuck
in a small range for much of 2017, as investors' confidence in the
economy and the prospect of rising interest rates spurred selling
in Treasurys.
"We've had a really big run in the past two weeks," said Tracy
Monroe Nolte, vice president of portfolio analysis at Advisors
Asset Management. "There's an expression of concern somewhere in
the market about inflation."
Inflation is a primary threat to the value of government bonds
because it erodes the purchasing power of their fixed payments.
The 10-year yield rose to as high as 2.644% in early trading
Friday, according to Tradeweb, before paring gains after the
University of Michigan said that a measure of U.S. consumer
sentiment slumped in January for the third straight month.
Government bonds have slipped in recent days even as U.S.
lawmakers remain on the brink of a potential government shutdown.
The House passed a one-month spending bill on Thursday night, but
the plan may not pass the Senate on Friday because of opposition
from most Democrats and some Republicans.
Some investors said they were not overly concerned about the
prospect of a shutdown.
"We'll probably see some additional volatility" in the bond
market, said Mr. Nolte. But, he added, "these things tend to work
out last minute."
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
January 19, 2018 11:16 ET (16:16 GMT)
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