Yields mixed as traders weigh stock swings, Fed outlook
TLT•TLT•TLT•TLT•U.S. Treasury yields were mixed as traders weighed volatile stock markets against expectations of a December Fed rate hike, which futures priced at an 81% chance. The Treasury will sell $125 billion in coupon-bearing debt this week.
The 2-year Treasury yield rose 0.81 basis point to 4.53%, while the 10-year yield fell 1.39 basis points to 4.845%. The spread between 2- and 10-year notes flattened to 31.3 basis points.
Stronger-than-expected October job growth boosted expectations of a rate hike at the Fed’s December 8-9 meeting. Consumer price data is due Tuesday and producer price data Friday. TD Securities’ Gennadiy Goldberg said he expects inflation to remain high enough for the Fed to lean toward a December hike, and added that Fed officials’ comments will also be watched.
The Treasury plans to sell $58 billion in 3-year notes on Monday, $42 billion in 10-year notes on Tuesday and $25 billion in 30-year bonds on Thursday. The U.S. bond market will be closed Wednesday for Veterans Day.
