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US Treasury yields rise due to vaccine optimism

Yields on the US Treasury rose on Friday due to volatile trading, and January’s closing price rose sharply. This was primarily because positive vaccine development helped raise expectations for a rapid recovery in the US economy.

What is the Treasury doing?

10-year government bond yield

It rose 3.5 basis points to 1.090%, unchanged this week and rose 17.7 basis points this month. 2 year note rate

It fell 0.6 basis points to 0.115%, down 0.8 basis points this week and 0.4 basis points in January.

30-year bond yield

It rose 3.7 basis points to 1.855%, flat this week, but rose 21.3 basis points this month.

What drives government bonds?

Weigh the assets of the shelter and compare Johnson & Johnson The vaccine was announced in late-stage studies to be 66% effective in preventing moderate to severe COVID-19, but was found to be less effective against South African variants. And Novavax
+ 64.87%

Late thursday i saidThe ts vaccine candidate was found to be 89% effective against this disease.

The potential for more vaccines to come online raises expectations that homes and businesses may face some similarities in normal economic life this year.

And in Europe, Friday’s Reuters news report said ECB officials I saw limited benefits From further lowering interest rates. The ECB’s major facility deposit rate is minus 0.5%.

Earlier this week, ECB Governing Council member Klaas Knot raised speculation that further rate cuts could be made to halt the euro’s rise.

The mixed message pushed up bond rates in the euro area and pushed up Treasury yields. 10-year German government bond yield

3.1 Basis points increased to minus 0.501%.

In US economic data, Personal income Core consumer spending inflation gauges rose 0.3%, with annual measurements rising to 1.5%, while rising 0.6%. Private consumption fell 0.2%.

How to read consumer sentiment According to an index produced by the University of Michigan, this month it fell from the original 79.2 to 79. Pending home sales fell 0.3% in December. Record a decrease for the fourth consecutive year.

What did the market participants say?

Rabobank analysts said the ECB “clearly sees a reduction in deposit rates as the most appropriate way to deal with this currency appreciation.”

“But at this point, he doesn’t intend to lower deposit rates, but he doesn’t want the market, so he seems to be pursuing a” eat with cake “strategy. To rule out the possibility of such reductions in the future, “they said.

US Treasury yields rise due to vaccine optimism US Treasury yields rise due to vaccine optimism

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