U.S. Treasury yields climbed Thursday as stocks rebounded from the worst selloff since October, easing demand for haven assets.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 1.051% rose 4.1 basis points to 1.055%, marking its biggest daily increase since Jan. 6, while the 2-year note rate TMUBMUSD02Y, 0.125% was flat at 0.121%. The 30-year bond yield TMUBMUSD30Y, 1.809% gained 3.8 basis points to 1.818%.
What’s driving Treasurys?
Investors eyed the recent volatility in Wall Street where the rebound in U.S. equities on Thursday helped to lift yields for government paper, opening the way up for bond traders to pile back on the reflation trade.
The frenetic trading in risk assets took away attention from key U.S. economic data released on Thursday. Investors were hoping to know how much the recovery’s pace slowed at the end of 2020 when several states instituted lockdown measures in a bid to stem a resurgent COVID-19 pandemic.
Fourth-quarter gross domestic product grew by 4%, after recording a 33% increase in the previous quarter. Initial jobless claims for the week of Jan. 23 fell to 847,000, from 914,000.
Meanwhile, new home sales ran at annualized pace of 842,000 in December, up 1.6% from November.
An auction for $62 billion of 7-year notes was taken down without market participants suffering much indigestion.
What did market participants say?
“What is impactful right now is volatility and the mood of risk assets,” said Padhraic Garvey, regional head of research for the U.S. at ING.
He anticipated smoother trading in stocks could help put government bonds yields back on its previous rising trajectory.
Add Comment