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Bond Report: Treasury yields tick higher as global stocks gain ground

U.S. Treasury yields rise early Monday as global equity markets pick up steam, rebounding from last week's weak trading. Read More...

U.S. Treasury yields rose early Monday as global equity markets picked up steam, rebounding from last week’s weakness amid concerns the resilience of the COVID-19 pandemic could hold back the economic recovery.

What are Treasurys doing?

The 10-year Treasury note yield TMUBMUSD10Y, 0.669% rose 1.3 basis points to 0.672%, while the 2-year note rate TMUBMUSD02Y, 0.132% was at 0.135%. The 30-year bond yield TMUBMUSD30Y, 1.415% added 1.8 basis points to 1.423%. Bond prices move inversely to yields.

What’s driving Treasurys?

Demand for haven assets eased as investors poured back into risky assets to start the week. Futures for the S&P 500 SPX, +1.59% and Dow Jones Industrial Average DJIA, +1.33% were pointing to a higher start for Wall Street, following gains in Asian and European stock markets.

See: Dow industrials aim to get off the week to a solid start, futures jump 350 points

Yet like previous weeks, much of this investor optimism didn’t translate into a significant yield move as expectations for the Federal Reserve to stay on hold for the next few years have limited bond-market volatility.

Still, Treasury traders are expected to mostly take cues from equity swings with little on the economic docket for Monday.

What did market participants’ say?

“Today’s global interest rate reaction to risk-on appetite is muted,” said Jim Vogel, an interest-rate strategist at FHN Financial.

Inflows from money managers into medium-term Treasurys “reduce the risk of an upside breakout in yields,” he said.

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