U.S. Treasury yields lacked direction on Thursday’s trade, consolidating a bond-market rally that has pulled yields for long-dated government bonds down again after a rise to pre-pandemic levels in the first quarter this year.
Investors will monitor a speech by Federal Reserve Chairman Jerome Powell at noon Thursday.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 1.650% was steady at 1.650%, while the 2-year note TMUBMUSD02Y, 0.148% was down 0.2 basis point to 0.149%. The 30-year bond yield TMUBMUSD30Y, 2.342% stood at 2.340%.
What’s driving Treasurys?
Bonds have seen a bid throughout this week, extending a multisession rally that has pulled the 10-year Treasury yield down from its recent high of 1.77%.
Some analysts have suggested the government debt market may be self-correcting, after pricing in an accelerated timetable for Fed interest rate hikes, more aggressive than the U.S. central bank has signaled.
Fed Chairman Jerome Powell will give a speech on the world economy at noon at the annual spring meetings of the IMF and World Bank in Washington, following the release of the minutes from the Fed’s latest monetary policy meeting on Wednesday.
The minutes showed that it would be “some time” before the Fed started tapering its asset purchases, a decision that would hinge on the realization of substantial further progress towards the Fed’s inflation and employment goals.
In U.S. economic data due Thursay, weekly initial jobless benefit claims are forecast to slide to 694,000, from 719,000.
What did market participants say?
“Rates markets have been trading more supported over recent sessions. Whether this is a reflection of deeper concerns such as surrounding the role of the AstraZeneca vaccine on the path towards herd immunity or just a post Easter hangover in a shortened week is difficult to say,” said Padhraic Garvey, regional head of research for Americas at ING, adding he still saw the path of yields as heading higher.