Long Bond Yields Fall In US; investors alert to possible stimuli

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 Long Bond Yields Fall In US; investors alert to possible stimuli




File photo. Poster at the United States Department of the Treasury in Washington.


© Reuters/BRIAN SNYDER
File photo. Poster at the United States Department of the Treasury in Washington.


Leek Karen Pierog

CHICAGO, Oct. 14 (Reuters) – Long-term U.S. Treasury yields fell slightly on Wednesday, as the market expects advances in Washington on stimulus measures to combat the economic fallout of the coronavirus pandemic.

The yield on the benchmark 10-year bond was down less than one basis point at 0.7239%. “Aside from possible news about vaccines and that sort of thing, the stimulus is probably the biggest news for the market,” said Tom Simons, a money market economist at Jefferies in New York. “But right now, it’s hard to see anything being done about it this year.”

On Tuesday, the parties appeared to be far apart, with Senate Majority Leader Mitch McConnell announcing a vote next week in his Republican-controlled chamber for $ 500 billion in targeted aid, while House Speaker Representatives, Democrat Nancy Pelosi, advocated for much higher spending.

Simons said that given the political stalemate on the stimulus, the market will be following speeches by US Federal Reserve officials on Wednesday for specific information on economic policy initiatives.

“We’ve had a few speeches from the Federal Reserve, but it’s pretty much the same as we’ve seen in the last two weeks,” he said. A larger-than-expected rise in prices from US producers in September did not move the market.

The yield on two-year US Treasuries, which typically keep pace with interest rate expectations, was up less than one basis point at 0.143%. A portion of the U.S. Treasury yield curve that measures the gap between two-year and ten-year Treasury yields, which is viewed as a proxy for economic expectations, was 57.90 basis points, minus from a basis point below Tuesday’s close. (Reporting by Karen Pierog; Edited in Spanish by Javier López de Lérida)

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