Treasury Yields Rise as Brexit Worries Recede
January 16 2019 - 12:35PM
Dow Jones News
By Akane Otani
U.S. government-bond prices inched lower Wednesday as traders
largely brushed off the latest blow to U.K. Prime Minister Theresa
May's Brexit plan.
The yield on the benchmark 10-year U.S. Treasury note was
recently at 2.727%, according to Tradeweb, compared with 2.710%
Tuesday.
Yields, which rise as bond prices fall, advanced overnight with
British government-bond yields as traders bet on Ms. May's defeat
in Parliament paving the way toward a softer Brexit plan.
The plan Ms. May had forged with the European Union was
overwhelmingly rejected in Parliament Tuesday -- an outcome that
analysts had widely been predicting in the days leading up to the
vote.
With the proposed deal off the table, some analysts believe Ms.
May will have to make concessions to opposing lawmakers to move
forward. That is easing investors' fears that the U.K. is heading
toward a "no-deal" Brexit, one in which the country would leave the
EU without any agreements about their future relationship.
"We stick to our call that the U.K. is headed to a soft Brexit,"
Bank of America Merrill Lynch rates and currencies analysts wrote
in an email. "We do not pretend that the path toward our scenario
is going to be a smooth one, but we think the impossibility of
satisfying the PM's red lines with the reality of negotiations and
the backstop are narrowing the range of options available."
Later Wednesday, investors will get a look at the Federal
Reserve's beige book report, a collection of anecdotes from
businesses around the country.
In previous months, companies have cited fallout from the U.S.'s
and China's trade fight, as well as rising interest rates and labor
costs. Wednesday's report will offer investors further insight into
the extent to which those factors, among others, are weighing on
business spending and confidence.
Write to Akane Otani at akane.otani@wsj.com
(END) Dow Jones Newswires
January 16, 2019 12:20 ET (17:20 GMT)
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