BOND REPORT: 2-year Treasury Yield Stages Biggest Daily Rise In 7 Weeks As Stocks Bounce
May 24 2019 - 3:15PM
Dow Jones News
By Sunny Oh
Friday trade in Treasurys ended at 2 p.m. Eastern Time
Treasury prices fell on Friday, pushing yields higher, as U.S.
equities erased some of the previous session's slump, sapping
appetite for government paper.
U.S. bond markets saw a holiday-shortened session
(http://www.marketwatch.com/story/as-stocks-gyrate-which-us-markets-are-closed-on-memorial-day-2019-05-23),
closing at 2 p.m. Eastern Time, in observance of Memorial Day, and
will be closed on Monday.
What are Treasurys doing?
The 10-year Treasury note yield rose 3.2 basis points to 2.327%,
trimming its weeklong drop to 6.9 basis points. The 2-year note
yield was up 4.5 basis points to 2.175%, marking its biggest daily
increase since April 1. The short-dated maturity fell 3 basis
points for the week.
The 30-year bond yield rose 2.3 basis points to 2.754%, paring
its weeklong decline to 7.1 basis points. Debt prices move in the
opposite direction of yields.
Meanwhile, yields for British 10-year pounds , known as gilts,
fell a single basis point to 0.955% after U.K. Prime Minister
Theresa May announced her resignation due to her inability to pass
a Brexit deal.
What's driving Treasurys?
With stock markets set to take a break from this Thursday's
selloff
(http://www.marketwatch.com/story/us-stock-futures-rise-on-signs-trump-administration-could-soften-huawei-stance-2019-05-24),
inflows into the bond-market waned. The S&P 500 and the Dow
Jones Industrial Average were on course to end higher on Friday,
paring their weeklong losses.
President Donald Trump said he anticipated a "fast" trade deal
with China
(https://www.cnbc.com/2019/05/24/trump-predicts-fast-trade-deal-with-china-but-provides-no-evidence.html),
and that the U.S. could pull back its ban against Huawei
Technologies Inc. as part of an agreement. Investors have grown
fearful that a resolution to the longstanding trade spat between
the U.S. and China would remain elusive, with some pointing to the
U.S.'s ban on Huawei as a sign of an entrenching dispute between
the two sides.
Yields briefly sagged after investors digested some downbeat
data on the business investment front. Durable goods orders for
April fell 2.1%
(http://www.marketwatch.com/story/durable-goods-orders-slump-21-in-april-and-business-investment-almost-dries-up-2019-05-24),
following a 2.6% increase in March. The more stable core capital
goods orders measure, which excludes defense and aircraft
investment, fell 0.9%.
What did market participants say?
"The more tensions escalate and the longer the negotiations
continue, the more uncertainty there will be and become more of a
drag be on investment spending in the U.S.," said Ward McCarthy,
chief financial economist for Jefferies.
(END) Dow Jones Newswires
May 24, 2019 15:00 ET (19:00 GMT)
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