Treasury yields fell slightly Tuesday as investors braced for the first debt auction of the week, which could weigh on prices for government paper.
What’s the bond market doing?
The 10-year Treasury note yield
TMUBMUSD10Y, -0.07%
fell 0.8 basis point to 2.584%, while the 2-year note yield
TMUBMUSD02Y, -0.16%
was down 0.4 basis point to 2.387%. The 30-year bond yield
TMUBMUSD30Y, +0.19%
was down 0.5 basis point to 2.989%. Prices for debt move in the opposite direction of yields.
The 10-year Italian government bond yield
TMBMKIT-10Y, +9.48%
surged 9 basis points to 2.69%.
What’s driving the market?
The Treasury Department will sell its first batch of auctions for the week, with $40 billion of 2-year maturities set to be sold at 1 p.m. Eastern time. It will also sell another $73 billion of debt in 5-year and 7-year notes later on Wednesday and Thursday. Trading in government bonds can be influenced by an influx of fresh bonds as broker-dealers make room for the incoming supply.
Italian government debt came under pressure ahead of a ratings review by S&P Global on Friday. The ratings firm has currently given Italy a BBB rating, two notches above sub-investment grade, but has issued a negative outlook on the country, a sign that Italy‘s rating may be lowered.
The European Union statistics office reported that Italy’s public debt had risen to 132.2% of its annual output in 2018, from 131.4%.
What else is on investors’ radar?
New home sales for March will come out at 10 a.m., with economists polled by MarketWatch expecting an annualized pace of 656,000. More importantly, market participants will keep an eye on the first estimate of first-quarter gross domestic product growth on Friday.
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Source : MTV
