Ten-Year Yield Jumps To Highest Levels In Almost A Year

Treasuries moved sharply lower over the course of the trading day on Tuesday, extending the downward move seen over the two previous sessions.

Bond prices came under pressure early in the session and saw further downside as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 9.9 basis points to 1.299 percent.

With the significant increase on the day, the ten-year yield ended the session at its highest closing level in almost a year.

The weakness among treasuries came as traders remained optimistic about additional stimulus from Washington, with Democrats continuing to move forward with President Joe Biden’s proposed $1.9 trillion relief package.

Recent signs indicating the coronavirus crisis is easing following a recent surge also reduced the appeal of safe havens such as bonds, as countries around the world continue to ramp up vaccine rollouts.

In U.S. economic news, the Federal Reserve Bank of New York released a report showing New York manufacturing activity grew at its fastest pace in months in February.

The New York Fed said its general business conditions index climbed to 12.1 in February from 3.5 in January, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 6.0.

With the much bigger than expected increase, the general business conditions index reached its highest level since hitting 17.0 last September.

A slew of economic data is due to be released in the comings days, including reports on retail sales, industrial production, housing starts, and existing home sales.

Trading on Wednesday may be impacted by reaction to the reports on retail sales, producer prices, industrial production and homebuilder confidence.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting, which may attract attention along with the Treasury Department’s auction of $27 billion worth of twenty-year bonds.

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