Treasuries head lower on US trade strategy rumor

Thursday, 17. January 2019 21:39

As the stocks rallied late in the session on Thursday, sovereign debt securities issued by the Department of the Treasury in Washington declined, sending yields higher. Sentiment changed as an unconfirmed report indicated Secretary Steve Mnuchin is suggesting to United States officials to roll back import tariffs for merchandise from China in order to make progress in bilateral trade negotiations. The dollar remained moderately higher for the day against major peers with the exception of the pound, while oil erased losses.

Earlier, the US sold $13 billion in inflation-linked notes due in ten years at a bid-to-cover ratio of 2.42, the lowest since July. The high yield at the auction, which is held every two months, came in at 0.919%. The demand measure was 2.59 in November.

The two-year yield surged 2.9 basis points to 2.574% at 3:35 pm ET. The five-year gauge jumped four points to 2.582%. The yield on the 10-year benchmark advanced 2.4 points to 2.748% after touching 2.758%, the highest level on a closing basis in almost three weeks. The 30-year bond yield was only slightly higher, at 3.073%, but it climbed to as much as 3.085%. Prices of corresponding futures lost 0.05%, 0.17%, 0.22% and 0.19%, respectively.

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