10-year Treasury yield retreats from 4-year high: Treasury prices rebounded on Thursday, pushing yields lower, as traders unwound short bets on government paper after the previous session’s selloff, analysts said.
- After consumer inflation data came in stronger than expected Wednesday, the 10-year yield hit a four-year high. But traders said the selloff extended too far, leaving hedge funds to unwind their short bets on government paper. The short trades were bets bond prices would fall and served as a way to insulate investors from rising rates.
- Inflation remains the main focus for bond investors after the consumer-price index in January rose 0.5%, above the 0.4% forecast by economists polled by MarketWatch. The core gauge, which strips out volatile food and energy prices, rose 0.3%, higher than the 0.2% expected.
- Rising inflation over the past several months has spooked bond investors, which have enjoyed a period of ultralow rates supported by the Federal Reserve. However, signs of rising prices risk ending a prolonged bull market in the bond market because the U.S. central bank may feel compelled to lift interest rates at a faster clip—four rate increases rather than three expected—amid reemergent inflation.
Fixed Rate Indices
|2-year...||20-Jan||1.25%||2.18%||( + )|
|5-year...||23-Jan||1.75%||2.64%||( - )|
|7-year||25-Jan||2%||2.82%||( - )|
|10-year||28-Feb||2.38%||2.89%||( - )|
|30-year||Feb-48||3%||3.14%||( - )|
|Treasury Rates are as of 02-15-18 as reported by The Wall Street Journal.|
|Last effective change||12/14/17|
Floating Rate Indices
London Interbank Offered Rates are as of 02-15-18 as reported by The Wall Street Journal.
|2-year SWAP....||26.00 bps||2.44%|
|5-year SWAP....||8.50 bps||2.72%|
|7-year SWAP....||-1.10 bps||2.8100%|
|10-year SWAP...||0.90 bps||2.90%|
SWAP Rates are as of 02-15-18 as reported by the Wall Street Journal.