BOND REPORT: Treasury Yields Fall After Auction Of 30-year Bonds
October 12 2017 - 2:42PM
Dow Jones News
By Sunny Oh
Wholesale prices in September jumped to 0.4%, pushing the annual
growth rate to 2.6%, the fastest pace since 2012.
Treasury yields fell on Thursday after a 30-year bond auction
attracted strong demand from investors, pressuring long-dated
yields.
What are yields doing?
The benchmark 10-year Treasury yield fell to 2.324%, compared
with 2.346% on late Wednesday. The shorter 2-year Treasury note
yield ticked lower to 1.509%, from 1.520%, while the 30-year bond
yield slipped to 2.852%, versus 2.876%. Bond prices move in the
opposite direction of yields.
What drove markets?
A strong auction for $12 billion of 30-year Treasury bonds
helped pull yields lower. Incoming supply of government paper can
influence trading for Treasurys. A common way to track the success
of the sale, the bid-to-cover ratio was 2.53, the highest since
Sep. 2015. It indicates the proportion of buyers to the amount
available bonds on the block.
With plenty of Fed officials going on the record, investors
gleaned further clues on the path of future monetary policy in the
wake of the release Wednesday of the minutes from the central
bank's September policy meeting. Former Fed Chief Ben Bernanke and
Fed Gov. Lael Brainard participated in a spirited debate on the
merits of price-level targeting, which argues inflation should
overshoot the 2% target if prices have spent long periods below the
desired rate.
See: December rate hike might not be automatic, minutes of last
month's meeting show
(http://www.marketwatch.com/story/december-rate-hike-not-automatic-minutes-of-last-months-meeting-show-2017-10-11)
What are market participants saying?
"As has been the case for a while now, the auctions in the
long-end present a liquidity opportunity for investors," wrote
Thomas Simons, senior money market economist for Jefferies.
What economic data is on investor's radar?
What central bankers are saying?
(END) Dow Jones Newswires
October 12, 2017 14:27 ET (18:27 GMT)
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