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Yields on U.S. Treasuries surged higher early on Friday, with the 10-year Treasury bill heading for its biggest yield rise in about six weeks, as debt prices were under pressure amid fears pent-up inflation, even as recent employment data has struggled to support fears. of reflation.
What do treasures do?
The 10-year treasury bill yields TMUBMUSD10Y,
rose 2.7 basis points to 1.314%, its highest since last February, while the rate on 2-year notes
was stable at 0.111%. The 30-year bond yield TMUBMUSD30Y,
gained 2.2 basis points to 2.098%.
For the week, the 10-year Treasury was heading for its biggest weekly yield rise, around 10 basis points, since around January 8, according to Dow Jones Market Data.
What motivates treasures?
Public debt markets renewed their efforts to sell, as investors remained concerned about the potential for inflation when and if Washington passed a new pandemic relief bill that could inject more than $ 1 trillion into the economy. economy, potentially increasing the savings that could be spent when the vaccine rollout inoculates a growing share of Americans.
But labor market data, including a recent report on jobless claims, showing modest job gains last month and a high rate of layoffs, has sapped some of the bond bear’s enthusiasm.
Treasury Secretary Janet Yellen said on Thursday that a major budget relief package was needed to counter the economic blow from the pandemic, defending the Biden administration’s proposed price of $ 1.9 trillion for the aid .
Meanwhile, the US economic calendar was sparse on Friday, with only existing home sales for January and surveys of purchasing managers in the service and manufacturing sector later in the morning.
What did market players say?
“Without a clear focus on today’s data and a more flexible risky asset market, the upward trend in bond yields could still falter,” wrote Padhraic Garvey, regional research manager for the Americas at ING.
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