Bond yields largely steady following Wall Street’s best day in nearly a month

Bond yields were little changed on Thursday from the previous session, with most trading around just one basis point lower as investors digest Wednesday’s market gains, which gave Wall Street its best day in nearly a month.

The yield on the benchmark 10-year Treasury note was down 1 basis point at 3.25% at around 5:40 a.m. ET. The yield on the 30-year Treasury bond was up under a basis point at 3.406%.

The yield on the 2-year Treasury traded under a basis point lower at 3.443%. The short-term note rose to 3.55% last week, reaching its highest level since 2007. Yields move inversely to prices, and a basis point is equal to 0.01%.

Related:  The Bond Market is Blowing Up Pt 1

The Federal Reserve released its Beige Book on Wednesday, which showed a still high but cooling inflation outlook and weak U.S. growth. It also saw a continued weakening in the residential real estate market.

Despite Wednesday’s market gains, stocks are still broadly on a downtrend as investors remain wary of a slowing economy and the Fed’s next moves on rate hikes.

Federal Reserve Vice Chair Lael Brainard, in a speech Wednesday, vowed to continue the fight against inflation “for as long as it takes” to get costs down.

“So far, we have expeditiously raised the policy rate to the peak of the previous cycle, and the policy rate will need to rise further,” she said. She added that policymakers will rely on data to ensure they don’t overreact on tightening measures.

Related:  Big payroll gains push recession fears into the corner — for now

On the data front, markets will be watching for early September’s initial jobless claims, as well as continuing and 4-week average jobless claims. The Energy Information Agency will release data on oil and gas stocks, and Fed Chair Jerome Powell is scheduled to deliver a speech at the Cato Institute’s 40th Annual Monetary Conference in Washington.

Auctions for 13-week, 26-week and 52-week bonds are due Wednesday.

Leave a Comment