U.S. Treasury yields stabilized early Tuesday amid rising animosities between China, while equity-market bullishness appeared to fade even as stocks neared record levels after better-than-expected corporate earnings.
Foreign buyers of also have proved be a big support to U.S. government bonds, keeping yields in check and prices elevated.
What are Treasurys doing?
The 10-year Treasury note yield
TMUBMUSD10Y,
were virtually unchanged at 0.683%, as was the 30-year bond yield
TMUBMUSD30Y,
at 1.424%.
The 2-year note rate
TMUBMUSD02Y,
meanwhile, was little-changed at 0.153%.
What’s driving Treasurys?
Yields for government edged up slightly on Tuesday after yields turned lower on Monday.
The moves come after a reading of home-building activity showed that construction on homes rose at a seasonally adjusted annual rate of 1.496 million in July, up 22.6% from the previous month and 23.4% from a year ago, the U.S. Census Bureau reported Tuesday.
Meanwhile, the U.S. Commerce Department issued new rules curbing Huawei Technologies’s access to foreign-made chips Monday, expanding the Trump administration’s restrictions on the Chinese telecom company’s link to crucial components.
In stimulus talks, Senate Majority Leader Mitch McConnell’s comments that continuing discussions on fresh coronavirus fiscal stimulus may not definitely lead to a deal, combined with media reports that Republicans are weighing further reducing the proposed stimulus amount, were sapping some of the optimism, Deutsche Bank analysts said in a note.
Against that back drop, equity markets have been making tepid moves higher, with the S&P 500 index
SPX,
approaching its first record close since Feb. 19, but momentum has been stalled partly due to the lack of substantive progress toward additional aid for out-of-work Americans.
On the U.S. economic data front, a report on Treasury buying published Monday showed that foreign buyers have been a support factor for Treasurys in June, with foreign inflows into the U.S. totaling $28.89 billion, compared with outflows of $36.69 billion the previous month.
What are market participants saying?
“We continue to watch 1.45% on 30yr yields to hold, however, trading through there would target 1.63%,” wrote Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities.
Source : MTV
