BOND REPORT: Treasury Yields Turn Higher With Stocks, Buoyed By Trade Hopes
June 26 2019 - 08:27AM
Dow Jones News
By Sunny Oh
U.S. Treasury prices fell on Wednesday, pushing yields higher,
after remarks from Treasury Secretary Steven Mnuchin raised
optimism that some progress on a U.S.-China trade deal was being
made, lifting U.S. equities.
What are Treasurys doing?
The 10-year Treasury note yield rose 3.2 basis points to 2.024%,
while the 2-year note yield climbed 4.7 basis points to 1.753%. The
30-year bond yield ticked higher by 2.1 basis points to 2.547%.
Debt prices move in the opposite direction of yields.
What's driving Treasurys?
Ahead of the G-20 summit, Mnuchin said they were "90% on the
way" to a deal, suggesting the meeting between President Donald
Trump and Chinese counterpart Xi Jinping at the end of the week
could help pave the way to an eventual trade agreement. Investors
have closely watched officials from both sides amid mixed signs
that the meeting between the two world leaders would yield progress
in trade negotiations to the satisfaction of investors.
Futures for U.S. stocks jumped after Mnuchin's comments. The
S&P 500 and the Dow Jones Industrial Average are poised to open
higher on Wednesday.
Analysts will see if U.S. corporations are holding back
investment plans as trade uncertainty shakes the confidence of
business executives. Durable goods orders reading for May along
with the trade deficit data for May is set to come out at 8:30 a.m.
Eastern
What did market participants' say?
"Mnuchin's constructive spin on the prospects for a deal were
credited for the bulk to the selling pressure in Treasuries and
we're on board with that interpretation; if for no other reason
than the dearth of data or other developments," wrote Ian Lyngen,
head of U.S. rates strategy at BMO Capital Markets.
What else is on investors' radar?
The Treasury Department will auction off $41 billion of 5-year
notes at 1 p.m. Eastern. The debt sale could help influence trading
for the outstanding market.
(END) Dow Jones Newswires
June 26, 2019 08:12 ET (12:12 GMT)
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