U.S. Treasury yields inch higher with fiscal stimulus talks still in focus



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U.S. Treasury yields edged higher on early Friday trade as investors held to hopes that a fiscal stimulus deal will be forthcoming this year after all from Congress.

What are Treasurys doing?

The 10-year Treasury note yield
TMUBMUSD10Y,
0.774%
rose 0.3 basis point to 0.770%, while the 2-year note rate
TMUBMUSD02Y,
0.160%
edged 0.2 basis point higher to 0.149%. The 30-year bond yield
TMUBMUSD30Y,
1.587%
added 0.9 basis point to 1.576%.

What’s driving Treasurys?

Washington continued to dominate the attention of traders who are still looking for Democratic and Republican lawmakers to strike an agreement on a new coronavirus aid relief package despite intermittent negotiations since August.

The White House it was open to a broader stimulus package only days after President Donald Trump said he was willing to do standalone fiscal measures only. House Speaker Nancy Pelosi, however, said any aid to airlines as requested by Trump would have to be embedded in a larger stimulus bill.

Analysts have called for new fiscal stimulus without which the economic recovery could turn increasingly rocky towards the end of this year, as U.S. households can no longer depend on additional federal unemployment benefits.

What did market participants’ say?

“Focus has been on further US fiscal stimulus efforts, with a strong ebb and flow on whether negotiations are on and the scope of any package that may be agreed to,” said Simon Deeley, a rates strategist at RBC Capital Markets, in a note.



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