Treasury Yields Edge Higher at the Start of a Holiday-Shortened Week

March 25, 2024

minute read

Yields on U.S. government bonds showed a slight upward trend on Monday morning, though they remained relatively stable as traders prepared for a bustling yet shortened week due to the holiday.

‍

In terms of price action, the yield on the 2-year Treasury note (BX:TMUBMUSD02Y) increased by 2.9 basis points to 4.627%, reversing a portion of its decline of 12.3 basis points from the previous week.

‍

Similarly, the yield on the 10-year Treasury note (BX:TMUBMUSD10Y) rose by 2.4 basis points to 4.241% following an 8.6 basis point drop last week. Additionally, the yield on the 30-year Treasury bond (BX:TMUBMUSD30Y) saw an increase of 2.1 basis points, reaching 4.413%, after a decline of 3.5 basis points in the previous week.

‍

Market analysts characterized Monday's movements in Treasury bonds as primarily technical, stemming from the rally influenced by last week's actions by the Federal Reserve. It's a common understanding that bond yields move inversely to bond prices.

‍

"We experienced a significant rally following the dovish Federal Open Market Committee decision. I believe markets are simply preparing for upcoming economic data and Fed speeches, returning to a slightly more neutral stance at this juncture," remarked Gennadiy Goldberg, a rates strategist at TD Securities, in an interview with MarketWatch.

‍

The spotlight of this week's economic agenda will shine brightest on Friday, coinciding with the closure of the bond market for the Good Friday holiday. Investors eagerly anticipate the release of the personal-consumption-expenditures index, seeking clues as to whether inflation maintained its upward momentum in February.

‍

Additionally, attention will be on Fed Chair Jerome Powell's remarks at an economics and monetary-policy conference hosted by the San Francisco Fed.

‍

This week, investors will also be watching auctions for 2-, 5-, and 7-year Treasurys, as these events play a crucial role in shaping market sentiment and determining the trajectory of yields.

‍