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U.S. Treasury yields were rising on early Wednesday as investors eyed speeches from senior Federal Reserve officials who could offer their insight on the tough economic road ahead.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 0.678% rose 1.2 basis points to 0.676%, while the 2-year note rate TMUBMUSD02Y, 0.140% was at 0.137%. The 30-year bond yield TMUBMUSD30Y, 1.427% was up 1.1 basis points to 1.426%. Bond prices move in the opposite direction of yields.
What’s driving Treasurys?
Investors will have plenty of speeches from the Fed to sift through as members of the central bank including Loretta Mester, Charles Evans, Raphael Bostic and Randal Quarles all set to speak in the course of Wednesday.
Fed Chairman Jerome Powell will also appear before the House Select Subcommittee on the Coronavirus Crisis.
The September flash reading of the IHS Markit eurozone composite purchasing managers’ index was at 50.1, barely above the 50 mark that tells if industrial activity is either expanding or shrinking.
The U.S. will see its own flash PMI readings for September for both the manufacturing and services sector at 9:45 a.m. ET.
The Treasury Department is set to sell $53 billion of 5-year notes, following the previous day’s successful sale of 2-year notes. Though new debt supply can weigh on the market, the market has been able to absorb the Treasury’s issuance due to the Federal Reserve’s clear commitment to not raising interest rates for the next few years.
What did market participants’ say?
” With U.S. fiscal stimulus efforts likely stalled until the election, the Fed remains the only game in town at a time when Covid is staging a comeback globally and some countries such as the U.S. as a latest example, reverting to stricter containment measures,” said Padhraic Garvey, regional head of research for ING, in a note.
