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U.S. Treasury yields rose again early Wednesday after President Donald Trump late Tuesday said he was open to standalone fiscal stimulus measures in tweets that looked to partially reverse his earlier cancellation of negotiations on another coronavirus aid relief package.
What are Treasurys doing?
The 10-year Treasury yield TMUBMUSD10Y, 0.779% rose 3.7 basis points to 0.777% and is now back near 6 week highs, while the 2-year note rate TMUBMUSD02Y, 0.152% edged 0.8 basis point higher to 0.155%. The 30-year bond yield TMUBMUSD30Y, 1.581% climbed 4.3 basis points to 1.580%.
What’s driving Treasurys?
Investors will watch if Washington lawmakers will restart negotiations on new fiscal stimulus measures, following Trump’s about-turn late Tuesday. Trump tweeted that he was open to passing several independent coronavirus relief measures, including stimulus checks and aid to airline workers.
Analysts note, however, Trump’s proposals would be a far cry from the multitrillion dollar stimulus package Democratic lawmakers have demanded.
All the same, yields have risen again on the possibility that progress towards more fiscal spending to support the economic recovery has not been derailed.
In other news, the Federal Reserve will release minutes from their September meeting later Wednesday.
Also, the U.S. Treasury Department will unload $35 billion of new issuance on Wednesday.
What did market participants’ say?
” The market has erased yesterday’s late afternoon gains attributed to Trump’s statement that stimulus negotiations are over until after the election as further Trump tweets namely surrounding stand-alone airline and $1200 check deals and global supply … have weighed on the market,” said Justin Lederer, an interest-rate strategist at Cantor Fitzgerald.
