|Day's Range||3.07 - 3.11|
|52 Week Range||2.03 - 3.12|
The Federal Reserve is all but guaranteed to raise interest rates in June, according to many investors and Wall Street economists. Beyond that, the central bank's options are limited by one critical factor, according to one market watcher. "While you have inflation and jobs numbers that are very Fed pleasing, you've got to watch out for that growth number which is expected to be somewhere" in the range of 3 percent, said Todd Colvin, senior vice president at Ambrosino Brothers, on CNBC's " Futures Now " this week.
U.S. government bond prices rose Friday, sending yields to their biggest one-day decline in six weeks. Next week’s auctions “should help the flattening trade,” said Aaron Kohli, an interest-rate strategist at BMO Capital Markets.
Treasury prices rose, pushing yields lower, Friday as geopolitical concerns, including those centered on global trade and Italian politics, stoked appetite for assets considered havens like U.S. government paper. Friday’s trading helped pare the weeklong selloff driven by the multitude of fears in the bond market, including rising bond supply, higher inflation and a faster pace of rate hikes than the Federal Reserve has penciled in. The 10-year Treasury note yield(XTUP:TMUBMUSD10Y=X) fell 4.2 basis points to 3.067%, after having touched a seven-year intraday high of 3.126% early on Friday.
U.S. stock markets ended lower on Thursday after President Donald Trump expressed doubts about the possibility of successful trade negotiations with China
Bond yields hit the accelerator again this week with the 10-year Treasury hitting its highest levels since mid-2011. Bond prices, which move inversely to yields, are now looking oversold, said Larry McDonald, editor of the Bear Traps Report. The U.S. 10-year yield is much higher than in Japan and Germany, but a global shortage of dollars has increased the cost of hedging these bonds.
The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 3.0984, while the yield on the 30-year Treasury bond was also lower at 3.2354 percent. A string of better-than-expected U.S. economic data helped push the 10-year Treasury note to a seven-year peak of 3.128 percent on Friday morning. The yield on U.S. 10-year sovereign debt fell back Friday morning but remained within touching distance of seven-year highs.
A range of emerging-market currencies fell against the dollar, pressured by worries that bond yields in the U.S. will continue rising. Late Thursday in New York, the dollar rose 0.6% against the Brazilian currency to 3.6965 reais, its highest level in more than two years. It rose 1.1% against the Turkish lira to hover near a fresh high, and notched gains against the South African rand, Russian ruble and other currencies.
Investors in U.S. government bonds could face serious pain if the Federal Reserve tries to steepen the so-called yield curve. “The Fed is one decision away from steepening the yield curve,” said Holman, who says if monetary policymakers ease away from forward guidance it could add uncertainty to investors’ forecasts for future rate hikes, pushing investors to demand higher yields for owning longer-dated bonds.
U.S. stocks closed slightly lower on Thursday, as a decline in technology and high-dividend sectors offset a pronounced rally in the energy sector. The Nasdaq Composite Index ended down by 0.2% to 7,383. Both the Dow and the Nasdaq were pressured by Cisco Systems Inc. , which dropped 3.8% a day after reporting services revenue that missed expectations.
Warren Buffett believes interest rates levels are a critical component in figuring out if a stock is cheap or expensive. "If interest rates are destined to be at low levels. As bond yields rally to multiyear highs , investors may want to remember Warren Buffett remarks on the importance of interest rates for valuing investments.
U.S. government bond prices inched lower in quiet trade following a mixed batch of economic data, driving the yield on the benchmark 10-year note to a fresh multiyear high. Bond yields, which fall as prices rise, struggled for direction overnight as North Korea threatened to pull out of a June summit and investors worried a new antiestablishment government in Italy could raise the chances of the country leaving the euro. jung yeon-je/Agence France-Presse/ Signs of geopolitical uncertainty caused Treasurys to struggle for direction. Signs of geopolitical uncertainty helped drum up some demand for Treasurys, although analysts warned bonds would likely remain under pressure in the absence of significantly weaker U.S. economic data.
If rates keep rising over the next three months, buying shares of Dow Jones industrial average members Goldman Sachs, Microsoft and Visa could be profitable, if history is any guide. Apple and J.P. Morgan Chase are also big winners when rates surge. Interest rates have been surging recently, with the benchmark U.S. 10-year Treasury note yield hitting levels not seen in nearly seven years.
The yield on 10-year U.S. benchmark notes jumped above 3.1% in early Thursday trade, but eased back later in the session as traders hit the pause button on the recent bond market selloff. In Italy, interest rates continued higher as the country’s two largest populist parties pushed forward with plans to form a coalition government. The 10-year Treasury note yield (XTUP:TMUBMUSD10Y=X) was up 0.2 basis point at 3.094%, but had risen above 3.115% earlier in the day.
The 10-year Treasury note yield (XTUP:TMUBMUSD10Y=X)rose 1.1 basis points to 3.093%, a day after registering the largest single-day climb since March 1, according to WSJ Market Data Group. The 30-year bond yield (XTUP:TMUBMUSD30Y=X) edged up 0.4 basis points to 3.214%, after the long bond marked its largest daily yield climb since Feb. 2 in the previous session. The short-dated two-year note yield (XTUP:TMUBMUSD02Y=X) , meanwhile, erased an earlier decline to eke out a rise of 0.4 basis points to 2.589%.
U.S. stocks rose Wednesday, with major indexes advancing in a broad rally as investors appeared to shake off fears of rising bond yields, helping equities resume a recent uptrend. Materials were the top performers of the day, closing 1.2% higher, while consumer staples and consumer discretionary stocks both rose 0.8%. The two declining sectors — utilities and real estate — are seen as ones that underperform in periods of rising bond yields, as their higher-than-average dividend yields become less attractive to income-seeking investors.
If the rise in rates " leads to or is associated with a renewed/sustained rally in the dollar exchange rate, it will have important implications for global asset allocation," warns Michael Darda of MKM Partners. Darda added gold could be in danger, as the higher rates could spark a bear market for the precious metal. Interest rates in the U.S. are at levels not seen in years and that could have massive ramifications across different financial markets, especially for gold, MKM Partners' Michael Darda warned on Wednesday.
U.S. financial conditions are getting tighter, a development that threatens to crimp the flow of money through markets.
Bets on the U.S. economy gaining momentum sent investors fleeing from government bonds, driving the yield on the benchmark 10-year Treasury note to levels it last touched nearly seven years ago. The latest wave of selling began early Tuesday, when data from the Commerce Department showed American consumers ramped up spending for everything from food to clothing to gasoline in April. Together, the reports showed the U.S. economy picking up steam, helping ease recent fears among investors that momentum could be fading in the second-longest economic expansion in U.S. history. Charlie Riedel/Associated Press Jesus Reyes pushes a television down an aisle as he shops at a Black Friday sale at a Best Buy store in Overland Park, Kan.
U.S. stocks traded tentatively higher early Wednesday as investors wrestled with rising rates, with bond yields holding at multiyear peaks after surging on Tuesday on brisker-than-expected retails sales and manufacturing. The Dow Jones Industrial Average was trading up 20 points, up less than 0.1%, at 24,727 after halting an eight session rally Tuesday as investors were spooked by the climb in the 10-year Treasury note to the highest level since 2011 above 3%. On Wednesday, rates mostly held their ground as investors digested the recent moves in government paper.