BOND REPORT: 10-year Treasury Yield Trades Above 3.10% Ahead Of Fed Decision
September 25 2018 - 4:57PM
Dow Jones News
By William Watts, MarketWatch
Treasury prices extended a weakening trend Tuesday, pushing the
10-year note yield above 3.10% a day ahead of a Fed decision that
is expected to deliver the third rate increase of 2018.
Read:Here's what bond traders will be watching when the Fed
makes its rate decision
(http://www.marketwatch.com/story/heres-what-bond-traders-will-be-watching-when-the-fed-makes-its-rate-decision-2018-09-25)
The yield on the benchmark 10-year Treasury rose 2.4 basis
points to end at 3.102%, its highest finish since May 17, when it
logged an intraday high near 3.13%. The 2-year yield rose 3.1 basis
points to 2.843%, its highest since June 2008, while the 30-year
Treasury bond yield ticked up 2.4 basis points to 3.233%. Yields
and debt prices move in opposite directions.
"The U.S. 10-year yield seems to be gearing up for an attack on
this year's high around 3.13%," wrote analysts at KBC Bank, in a
note.
The yield rise comes ahead of the conclusion of a two-day
meeting of Fed policy makers on Wednesday that is seen as virtually
certain to deliver a quarter-point rate increase, bringing the
fed-funds rate to a range of 2% to 2.25%. Investors will focus on
the Fed's policy statement, forecasts and, in particular, remarks
by Fed Chairman Jerome Powell in his news conference.
Also:The Powell Fed can make history if it can slow the economy
without crashing it
(http://www.marketwatch.com/story/the-powell-fed-can-make-history-if-it-can-slow-the-economy-without-crashing-it-2018-09-24)
Treasury traders also dealt with another round of supply as the
government sold $38 billion in five-year notes . The sale attracted
relatively soft bidding, analysts said.
On the data front, the Conference Board's September consumer
confidence index climbed
(http://www.marketwatch.com/story/consumer-confidence-surges-in-september-to-18-year-high-near-all-time-peak-2018-09-25)
to an 18-year high at 138.4 from a revised 134.7 in August.
Earlier, the S&P CoreLogic Case-Shiller 20-city housing
price index rose 0.1% in July and was up 5.9% compared to a year
ago., while a September reading on consumer confidence is set to be
released at 10 a.m.
Stocks put in a mixed performance
(http://www.marketwatch.com/story/stock-futures-slightly-higher-major-indexes-near-records-2018-09-25)
a day after an apparent intensification of trade tensions, with the
implementation of additional tariffs by the U.S. on Chinese goods
and the threat of retaliatory tariffs by China on U.S. goods and
the cancellation of negotiations, weighed on the market.
Knee-jerk reactions aside, stocks have largely brushed off trade
worries in 2017, with the Dow Jones Industrial Average and the
S&P 500 index trading at records last week.
(END) Dow Jones Newswires
September 25, 2018 16:42 ET (20:42 GMT)
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