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Treasury Yields Fall After Biggest Back-up Over Two Days Since February

April 12, 2024
minute read

On Friday morning, yields on U.S. government bonds experienced a widespread decline due to investor shifts toward safe-haven assets, driven by concerns over potential escalation of tensions in the Middle East.

The yield on the 2-year Treasury note, known as BX:TMUBMUSD02Y, decreased by 6.8 basis points to 4.891%, down from 4.959% recorded on Thursday.

Similarly, the yield on the 10-year Treasury note, BX:TMUBMUSD10Y, fell by 7.9 basis points to 4.496%, compared to 4.575% the previous day. Additionally, the yield on the 30-year Treasury note, BX:TMUBMUSD30Y, dropped by 6.6 basis points to 4.595%, down from 4.661% on Thursday.

The primary factor influencing market movements is the evolving situation in the Middle East. Reports suggest that Israel is preparing for a potential direct attack from Iran, possibly occurring as early as Friday or Saturday, as per The Wall Street Journal. However, there's uncertainty surrounding this information, with a person briefed by Iranian leadership indicating that no final decision has been made.

In domestic developments, data released on Friday revealed a decline in consumer sentiment for April, dropping to 77.9 from 79.4 in March, according to preliminary figures from the University of Michigan.

This dip signals growing frustration regarding inflation among consumers. Additionally, the import price index rose by 0.3% in March for the third consecutive month, mainly due to increased oil prices, contributing to upward pressure on inflation in the United States.

The recent surge in yields for the 10-year and 30-year Treasury notes, experiencing increases of 21 basis points and 16.2 basis points respectively on Wednesday and Thursday, marked their most significant two-day gains since periods ending on February 5th and April 2nd.

This surge was triggered by a higher-than-anticipated U.S. consumer price index for March, which raised doubts about the Federal Reserve's ability to execute three interest rate cuts within the year.

Adan Harris
Managing Editor
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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