U.S. Treasury yields fell in the direction of Thursday’s trade, cementing a bond market rally that has again reduced long-term government bond yields after rising to levels. pre-pandemic in the first quarter of this year. Investors will follow a speech by Federal Reserve Chairman Jerome Powell on Thursday noon.
What are Treasurys doing? The yield of the 10-year Treasury note TMUBMUSD10Y, 1.657% remained stable at 1.650%, while the 2-year note TMUBMUSD02Y, 0.148% fell 0.2 basis points to 0.149%. The yield of the 30-year bond TMUBMUSD30Y, 2.351% stood at 2.340%. What drives the Treasurys? The bonds have seen an offer throughout this week, extending a multi-session rally that has reduced the 10-year Treasury yield from its recent high of 1.77%. Some analysts have suggested that the government debt market may self-correct, after pricing on a fast-paced schedule for the Fed’s interest rate hikes, more aggressive than the US central bank has signaled. Chairman Jerome Powell will deliver a speech on the world economy at noon at the IMF and World Bank annual spring meetings in Washington, following the release of the minutes of the Fed’s last monetary policy meeting on Wednesday. The minutes showed that it would be “some time” before the Fed began to reduce its asset purchases, a decision that would depend on making substantial additional progress toward the Fed’s inflation and employment targets. In the United States to be released on Thursday, weekly initial jobless claims are forecast to drop to 694,000, from 719,000. What did market participants say? “The rate markets have been operating with more support during the last sessions. It‘s hard to say whether this is a reflection of deeper concerns, such as the role of the AstraZeneca vaccine on the road to herd immunity or just a post-Easter hangover in a shortened week, ”said Padhraic Garvey, regional head of research for the Americas at ING, adding that he still saw the yield path going higher.