Yields on US Treasuries rose early Tuesday as investors watched a debt auction and a weekday Federal Reserve meeting. The yield on the 10-year Treasury note BX: TMUBMUSD10Y stood at 1.583%, 1.5 basis points more than on Monday. The 30-year BX: TMUBMUSD30Y rate rose 1.4 basis points to 2.257%, while the yield on the 2-year BX: TMUBMUSD02Y added 0.6 basis points to 0.176%.
What drives the Treasurys? The climax of Tuesday’s trading is a sale of 7-year notes for $ 62 billion, the last auction of US Treasury debt of the week. A poor selling performance of this maturity provided the spark for a strong sell-off in the bond market in late February that sent the 10-year Treasury yield above 1.60% for the first time in a year. . The Fed will start its two-day policy meeting on Tuesday. Analysts are not expecting a change in tone or major policy decisions, instead touting the June meeting as the one to watch for clues as to when the US central bank could start to reduce asset purchases. The Bank of Japan said it expected inflation not to hit the central bank’s 2% target until 2024 as the coronavirus pandemic intensified. The BOJ also said it would be willing to extend its pandemic relief program beyond the September deadline. In US economic data, the Conference Board Consumer Confidence Index for April will be released at 10am ET. What did market participants say? “The resurgence of Covid-19 numbers in other corners of the world injected some caution after an abundance of market optimism, but eventually the Fed will rebound and will have to acknowledge progress, even if that is not tomorrow,” Antoine said Bouvet, Senior Rate Strategist. in ING.