Bond Report: 2-year Treasury yield jumps by most in a week, with U.S. economic strength in focus

by | Oct 24, 2023 | Stock Market

Treasury yields finished mixed on Tuesday as traders weighed U.S. economic strength against the potential for a mid-November government shutdown and the lack of a ground invasion by Israel of Gaza.

What’s happening
The yield on the 2-year Treasury
jumped 4.3 basis points to 5.103% from 5.060% on Monday. That’s the largest one-day advance in a week, according to 3 p.m. Eastern time figures from Dow Jones Market Data.

The yield on the 10-year Treasury
rose less than 1 basis point to 4.84% from a one-week low of 4.836% Monday afternoon.

The yield on the 30-year Treasury
declined 2.5 basis points to 4.963% from 4.988% late Monday. Tuesday’s 3 p.m. level is the lowest for the 30-year rate since Oct. 17.

What drove markets Two- through 30-year yields finished mixed after having been broadly higher earlier in the day as traders initially focused on the outlook for U.S. politics and the lack of major escalation in the Middle East war.The militant group Hamas released two hostages on Monday as Israel ramped up airstrikes and didn’t proceed with a ground assault yet. Oil settled lower for a third straight session on Tuesday, with supplies unaffected by the war so far.Back in the U.S., Republicans voted for Rep. Tom Emmer of Minnesota to become their latest nominee for speaker of the U.S. House of Representatives, a selection that comes three weeks after the historic ouster of Kevin McCarthy. Data released on Tuesday showed the economy getting off to a good start in the fourth quarter. The S&P U.S. services purchasing managers index for October rose to a three-month high of 50.9 for October, while the manufacturing PMI climbed to a six-month high of 50. See: Economy gets off to good start in the fourth quarter, S&P finds Meanwhile, Treasur …

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