(Recasts; adds results of two-year, five-year note auctions, analyst comment, bullets; updates prices) * U.S. two-year yield hits highest since early July * U.S. two-year note auction shows strong results * U.S. five-year sale shows mixed outcome By Gertrude Chavez-Dreyfuss NEW YORK, Aug 28 (Reuters) - U.S. Treasury yields were little changed to modestly lower on Monday, pulling back from their highs last week, as investors awaited key U.S. economic data, led by the non-farm payrolls report for August on Friday that should help determine the path of interest rates this year and next. U.S. two-year yields rose as high as 5.106%, the highest since July 6, with market participants pricing in higher interest rates for some time to contain persistently elevated inflation. The rate move was in line with Federal Reserve Chair Jerome Powell's hawkish message on Friday. The two-year yield, which reflects interest rate expectations, was last flat at 5.048%. Volume was thin overall with most market participants out ahead of the Labor Day weekend, and with Monday's holiday in the UK. "Most of the action would come later this week as the U.S. data starts to come out. You'll probably see a little volatility," said Jim Barnes, director of fixed income at Bryn Mawr Trust in Berwyn, Pennsylvania. "At the end of the day, now that Jackson Hole is behind us, Jerome Powell's message is consistent in the sense that economic data will pave the way for future monetary policy," he added. Powell, in remarks at the annual Jackson Hole Economic Policy Symposium on Friday, said the U.S. central bank may need to raise interest rates further to cool still-too-high inflation. But he promised the Fed would move carefully, noting both progress on easing price pressures and risks from the surprising strength of the U.S. economy. Monday's auctions by the U.S. Treasury were mixed, with the $45 billion two-year note sale garnering more demand than the $46 billion five-year offering. The two-year notes fetched a high yield of 5.024% , the highest in 17 years. That was lower than the expected rate at the bid deadline, suggesting investors were willing to accept a lower rate for the note and meant increased demand. The U.S. five-year note auction was not as strong, analysts said, picking up a high yield of 4.4% , matching expectations. The high yield was the highest since late 2007. The country's debt managers will next sell $36 billion in seven-year notes on Tuesday. The yield curve, as measured by the gap between U.S. two-year and 10-year yields, reduced its inversion after the auctions. The curve, which historically predicts recession, was last at -83.80 bps. Earlier on Monday, the curve inverted to as much as -88.20 bps, matching the spread hit on Aug. 10. The added inversion reflected expectations of more interest rate hikes. Markets anticipate an 80% chance of the Fed's standing pat next month, Refinitiv's FedWatch tool showed, but the probability of a rate hike in November is now seen at roughly 56%. In early afternoon trading, the yield on the benchmark 10-year note was down 3.3 bps at 4.209%. U.S. 30-year yields were also lower, down 1.2 bps at 4.2 83 %. August 28 Monday 2:13PM New York / 1813 GMT Price Current Net Yield % Change (bps) Three-month bills 5.3425 5.5026 0.018 Six-month bills 5.35 5.5708 -0.003 Two-year note 99-115/256 5.0523 -0.004 Three-year note 99-22/256 4.7086 -0.017 Five-year note 98-188/256 4.4132 -0.020 Seven-year note 98-6/256 4.3331 -0.032 10-year note 97-72/256 4.2118 -0.027 20-year bond 98-132/256 4.4882 -0.017 30-year bond 97-76/256 4.286 -0.009 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrea Ricci and Leslie Adler)
Market Closed -
Other stock markets
|
5-day change | 1st Jan Change | ||
3.372 EUR | +0.55% | +1.07% | +1.18% |
2023 | India bond yield curve inversion to persist on tight liquidity, inflation fears - traders | RE |
2023 | EMEA Morning Briefing : Investor Sentiment Seen Weighed by Inflation Worries | DJ |
Stocks mentioned in the article
Price
|
Change
|
5d. change
|
Capi.
| ||
---|---|---|---|---|---|
3.372 EUR | +0.55% | +1.07% | 8.39M | ||
1.272 USD | -0.03% | +0.19% | - | ||
1.083 USD | +0.01% | -0.58% | - | ||
0.7297 USD | -0.09% | -0.72% | - | ||
0.6629 USD | +0.16% | -1.06% | - | ||
0.6113 USD | +0.23% | -0.26% | - | ||
0.012 USD | -0.00% | 0.00% | - | ||
- Stock Market
- Equities
- S1387 Stock
- News Quadriga Global Allocation, SICAV, S.A.
- TREASURIES-U.S. yields flat to slightly lower ahead of key data