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Ten-Year Yield Closes Above 2.9% For First Time Since December 2018

Treasuries showed a notable move to the downside during trading on Tuesday, extending the downward trend seen over the past several weeks.

Bond prices came under pressure early in the session and remained firmly negative throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.1 basis points to 2.913 percent.

With the continued upward move, the ten-year yield closed above 2.9 percent for the first time since December 2018.

Concerns about the outlook for monetary policy continued to weigh on treasuries amid expectations the Federal Reserve will aggressively raise interest rates in an effort to combat elevated inflation.

Treasuries' appeal as a safe haven also waned, as the Commerce Department released a report showing new residential construction expectedly saw modest growth in the month of March.

The report showed housing starts rose by 0.3 percent to an annual rate of 1.793 million in March after spiking by 6.5 percent to a revised rate of 1.788 million in February.

The uptick surprised economists, who had expected housing starts to fall by 1.4 percent to a rate of 1.745 million from the 1.769 million originally reported for the previous month.

The Commerce Department said building permits also climbed by 0.4 percent to an annual rate of 1.873 million in March after slumping by 1.6 to a revised rate of 1.865 million in February.

Building permits, an indicator of future housing demand, had been expected tumble by 1.8 percent to a rate of 1.825 million from the 1.859 million originally reported for the previous month.

A report on existing home sales may attract attention on Wednesday along with the Fed's Beige Book, which could provide additional clues about the outlook for monetary policy.

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