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U.S. Treasury yields added to their weekly rise on early Friday’s trade, nearing key trading levels that could augur a further selloff in the bond-market.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 0.866% rose 1.3 basis points to 0.861%, up around 12 basis points since the end of last week, while the 2-year note rate TMUBMUSD02Y, 0.157% edged 0.2 basis point up to 0.157%. The 30-year bond yield TMUBMUSD30Y, 1.679% added 2 basis points to 1.678%.
If the 10-year note breaks beyond the 200-day moving average 0.862% level on a sustained basis, investors say it could hail a larger yield rise.
What’s driving Treasurys?
The bond market has come under steady pressure over the week amid expectations that a coronavirus relief package will arrive from Congress, widening the fiscal deficit further, even if the White House and House Democrats are unable to achieve a deal before the presidential election.
The spurt in economic growth expectations has helped to widen the gap between shorter and longer-term bond yields, steepening the yield curve. The spread between the 2-year note and 10-year note now stands at 70 basis points, around its widest in two years.
Some U.S. economic data is on the docket, with IHS Markit releasing its purchasing managers’ index for both the U.S. manufacturing and services sector in 9:45 a.m. ET.
What did market participants say?
“We are watching to see if 10-year yields hold the 200-day moving aver-
age at 0.862% as a close above there would target 0.91%,” said Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities.
