US 10-Year Yield Nears 5.2% as Higher Real Rates Keep Bond Selloff Intact
Updated
Updated · ING Think · Sep 24
US 10-Year Yield Nears 5.2% as Higher Real Rates Keep Bond Selloff Intact
3 articles · Updated · ING Think · Sep 24
Summary
5.2% is now within reach for the US 10-year Treasury yield after Wednesday’s jump above 5.1%, extending a selloff that followed weak 5-year and 7-year auctions.
Higher real yields are driving the move more than inflation expectations, with resilient US data, elevated energy prices and persistent price pressures keeping long-end rates under strain.
4.1 billion dollars of Treasury buybacks in Thursday’s reverse auction helped contain swap spreads, but analysts say the support is only moderately positive and does not alter the bearish debt-supply backdrop.
Next week’s US payrolls, PCE and ISM data, along with eurozone flash CPI, are seen as the next major test for rates after this week’s level shift higher.