Bond Report: 30-year yield rises back above 5% as traders eye U.S. GDP and inflation data this week

by | Oct 25, 2023 | Stock Market

Most Treasury yields jumped amid an aggressive selloff Wednesday morning, as investors awaited U.S. economic growth and inflation data in the next few sessions. What’s happening
The yield on the 2-year Treasury
slipped 1.6 basis points to 5.087% from 5.103% on Tuesday.

The yield on the 10-year Treasury
rose 6.7 basis points to 4.907% from 4.840% Tuesday afternoon.

The yield on the 30-year Treasury
jumped 8.4 basis points to 5.047% from 4.963% late Tuesday after touching an intraday high of 5.063% on Wednesday. The last time the 30-year rate ended the New York session above 5% was last Friday.

What’s driving markets Traders are awaiting U.S. data this week that may provide more clues about the strength of the economy and impact the Federal Reserve’s thinking ahead of its Oct. 31-Nov. 1 policy meeting.

A reading on third-quarter GDP is set to be released on Thursday, followed by the Fed’s preferred inflation gauge, the PCE index, on Friday. The U.S. economy may have grown 5% in the third quarter — defying widespread expectations for a slowdown. And economists polled by The Wall Street Journal expect core PCE readings to come in at 0.3% for September and 3.7% on a year-over-year basis. Data released on Wednesday showed that new home sales rose to a 759,000 annual rate for September, above forecasts, while the August reading was revised slightly higher. Meanwhile, Will Compernolle, a macro strategist for FHN Financial in New York, said factors like the abundance of Treasurys, stubborn inflation, and a potentially higher neutral fed funds rate were playing important roles in Wednesday’s selloff of long-dated maturities. Markets are pricing in a 99.2% probability that the Fed will leave interest rates unchanged between 5.25%-5.5% on Nov. 1, according to the CME FedWatch Tool. The chance of a 25-basis-point rate hike to a range of 5.5%-5.75% by the subsequent meeting in December is seen at 29.6%, down from …

Article Attribution | Read More at Article Source

Share This