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U.S. government bond yields were rising Tuesday, extending a climb that has been underway since late September when the Federal Reserve signaled that it could begin tapering its monthly bond purchases by the end of 2021.
What yields are doing
-
The 10-year Treasury note rate
TMUBMUSD10Y,
1.492%
is at 1.499%, versus 1.481% at 3 p.m. Eastern Time on Monday. -
The 2-year Treasury note yields
TMUBMUSD02Y,
0.285%
0.282%, compared with 0.278% a day ago. -
The 30-year Treasury bond
TMUBMUSD30Y,
2.053%
was yielding 2.061%, from 2.048% on Monday.
What’s driving the market?
The rise in yields has been blamed partly on fears the Federal Reserve may be forced to hasten the rate of reduction in $120 billion in monthly purchases and deliver interest rate increases as inflation has risen faster the forecast.
The health of the jobs markets is likely to be the main driver for government debt this week, with data on the private-sector for September due Wednesday from ADP and the U.S. Labor Department’s monthly report on Friday,
Ahead of that labor-market data, investors will be watching for a report on international trade in goods and services that is due at 8:30 a.m. ET Tuesday.
A final reading of the composite purchasing managers index from IHS Markit is due at 9:45 a.m. ET, followed by a service-sector reading from Institute for Supply Management at 10 a.m.
What analysts are saying
“Equity volatility remains high the first week of October which keeps a
bid in Treasury prices,” wrote Tom di Galoma, managing director at Seaport Global Holdings, in a daily note. Next week’s Treasury supply on Tuesday and Wednesday after the Columbus Day holiday should allow for yields to rise into late Q4. All eyes on US Jobs data on Friday,” he wrote.
