US yields mostly rise as negative sentiment in bonds holds
TLT•US Treasury yields mostly rose, with 10-year and 30-year yields reaching fresh 24-year highs. Traders priced in about a 76% chance the Federal Reserve would hold rates steady in October, while investors focused on upcoming Treasury auctions.
1. Yields reach new highs
US Treasury yields mostly rose on Monday as negative sentiment in the bond market persisted and investors weighed the outlook for higher rates. The 10-year yield was up 3.4 basis points at 5.311%, after reaching 5.3493%, while the 30-year yield rose 3.2 basis points to 5.662%, after touching 5.7029%; both intraday highs were their highest in 24 years.
2. Data and Fed outlook
US services activity slowed in September, while a measure of prices paid by businesses for inputs reached its highest level in more than four years. Traders priced in about a 76% chance that rates would remain unchanged at the Fed’s October 27-28 meeting and nearly a 90% chance of a December hike. The two-year Treasury yield was down 0.4 basis points at 4.821%.
3. Auction focus
Investors were watching upcoming Treasury auctions, including a three-year auction on Tuesday. Weak demand at auctions last month added to the recent bond selloff. Overseas fiscal concerns and worries about higher inflation and oil prices also weighed on bonds, while oil prices fell on Monday.
