Financial News Agency (Shanghai, Editor Xiaoxiang) News, the indicator 10-year U.S. bond yield fell back on Wednesday after hitting the 1.90% mark. As the yield is getting closer to the 2% mark that short sellers have dreamed of in the past year, technical aspects The upward resistance has begun to strengthen. The strong demand for the 20-year U.S. Treasury bonds sold overnight by the U.S. Treasury Department also weighed on long-term bond yields to a certain extent.
market data shows that U.S. bond yields of various cycles rose or fell on Wednesday. Among them, the 2-year U.S. bond yield rose 1.47 basis points to 1.057%, the 5-year U.S. bond yield fell 1 basis point to 1.648%, the 10-year U.S. bond yield fell 0.89 basis points to 1.865%, and the 30-year U.S. bond yield fell 0.89 basis points to 1.865%. U.S. Treasury yields fell 1.2 basis points to 2.176%.
U.S. Treasury yields have risen sharply this month as investors bet the Federal Reserve will tighten monetary policy more aggressively to combat unabated inflationary pressures. But the rise paused on Wednesday, especially as the 10-year U.S. Treasury yield faced some resistance when it hit the 1.90% mark. Previously, from November 2019 to January 2020, the 10-year U.S. bond yield encountered resistance near the range of about 1.92% to 1.97%, which attracted many bond market bulls to enter the market.
The demand for the $20 billion 20-year U.S. Treasury bonds sold by the U.S. Treasury Department was good, which also moderated the rise in yields to a certain extent. The winning interest rate of in this round of auction is 2.21%, which is more than 1 basis point lower than the trading level in the secondary market before the auction. The 20-year U.S. Treasury yield was last at 2.20%, having earlier hit 2.28%, the highest since May 2021.
Jefferies money market economist Tom Simons said, "After weak demand in several auctions last year, the recent reduction in the size of the 20-year U.S. Treasury bond issuance may have helped this round of auctions. Of the 20-year Treasury bonds issued last year, The Treasury period is the least popular, but now that the Treasury Department has reduced the auction size of Treasury bonds for this period quite significantly, we are seeing the supply tighten a little further."
Biden shouted support for the Fed to adjust its policy
But currently Judging from the view, even if the short-term trend has taken a break, it seems that the U.S. bond yields rising above the 2% mark are still the general trend. On Wednesday, the strong performance of U.S. bond yields since the beginning of the year continued to drag down highly valued technology stocks on the U.S. stock market. The Nasdaq Composite Index fell another 1.15% that day, falling by more than 1% from the historical high set in November last year. 10%, officially falling into the technical correction zone.
US President Biden held a press conference on the first anniversary of his administration on Wednesday local time. Biden pointed out at the press conference that the issue of inflation is closely related to the supply chain, and the government has made progress in accelerating the acquisition of raw materials. The key job of ensuring that high prices do not become entrenched lies with the Federal Reserve.
Biden said, "As Fed Chairman Jerome Powell has said, given the economic recovery and the speed of recent price increases, it is appropriate to recalibrate the (monetary policy) support that is necessary now."
At present, interest rates Investors in the swap market have fully digested the expectation that the Federal Reserve will raise interest rates at its March meeting, and will raise interest rates three times this year. The Federal Reserve's January interest rate meeting next week will also be closely watched by investors for clues on whether the Fed will provide clues on accelerating the end of its bond purchase program and when it may begin to reduce the size of its huge balance sheet.
Damien McColough, head of fixed income research at Sydney at Westpac Banking Corporation, said, "It is a certainty that the 10-year U.S. Treasury yield will hit the 2% mark. By then, the sell-off in the bond market may continue for some time. Once the Fed starts to raise interest rates for the first time, yields will definitely continue to rise." Shane Oliver, director of investment strategy at
AMP Capital, pointed out, "I expect the 10-year Treasury yield to rise to around 2.5% in the next few months. It could rise to 2.75% by the end of the year, depending of course on how quickly the Fed raises interest rates. The bond market is starting to realize that the secular stagnation in interest rates is over and inflation will remain high for longer, so yields will continue to move higher. ”
According to the median estimate of a Bloomberg survey of economists, the benchmark 10-year Treasury bond yield in the United States may rise to 2.13% by the end of this year.
