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U.S. Treasury yields rose early Monday, along with buoyant stock futures, after President Donald Trump signed legislation that provides $900 billion for pandemic relief and $1.4 trillion bill to fund the government.
The bond market will be closed on Friday due to the New Year’s Day holiday.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 0.955% was up 3 basis points to 0.960%, while the 2-year note rate TMUBMUSD02Y, 0.129% edged 0.8 basis point higher to 0.129%. The 30-year bond yield TMUBMUSD30Y, 1.701% climbed 4.1 basis points to 1.707%. Bond prices move in the opposite direction of yields.
What’s driving Treasurys?
Trump signed the $900 billion fiscal relief package and a government spending bill on Sunday, funneling aid to cash-strapped households and businesses and averting a federal government shutdown. With the COVID-19 pandemic showing few signs of slowing down, Americans had clamored for more help to get through the hard winter months ahead.
With a resolution of the months of debate in Washington over fiscal aid, demand for government bonds eased while equity futures rose.
Traders will face a busy docket of new issuance throughout the week, adding to the bearish pressure on the market. The Treasury Department will sell $58 billion of 2-year notes and $59 billion of 3-year notes on Monday.
What did market participants say?
“Stimulus has finally left Washington, free to wing into the hands of consumers and smaller businesses to actually begin the economic impact that traders view as simple math. That is, they see federal dollars with a multiplier impact to leverage and improve recovery,” said Jim Vogel, an interest-rate strategist at FHN Financial.
