10-year Treasury yields head towards 1.50% as yields prolong positive factors

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US Treasury bond yields rose Tuesday, continuing a surge that has been underway since late September when the Federal Reserve signaled it could curb its monthly bond purchases through the end of 2021.

What returns do
  • The 10-year government bond rate TMUBMUSD10Y, 1.505%, is 1.499%, down from 1.481% on Monday at 3:00 p.m. Eastern Time.

  • The 2-year government bond is yielding TMUBMUSD02Y, 0.285% 0.282%, compared with 0.278% a day ago.

  • The 30-year government bond TMUBMUSD30Y, 2.062%, returned 2.061%, down from 2.048% on Monday.

What is driving the market?

The rise in yields has been attributed in part to fears that the Federal Reserve may be forced to accelerate the $ 120 billion cut in monthly purchases and raise interest rates as inflation has risen faster than forecast.

Labor market health is likely to be the main driver of the national debt this week, with data on the private sector for September released by ADP on Wednesday and the US Department of Labor’s monthly report on Friday.

Ahead of this labor market data, investors will be on the lookout for a report on international trade in goods and services expected at 8:30 a.m. ET on Tuesday.

A final reading of IHS Markit’s composite purchasing managers’ index is due at 9:45 a.m. ET, followed by a services sector reading from the Institute for Supply Management at 10 a.m.

What analysts are saying

“Stock volatility remains high in the first week of October, what
bid in treasury prices, ”wrote Tom di Galoma, Managing Director at Seaport Global Holdings, in a daily note. Next week’s Treasury deals on Tuesday and Wednesday after the Columbus Day holiday should allow yields to rise well into the end of the fourth quarter. All eyes on the US jobs data on Friday, ”he wrote.

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