Saturday 19 August 2017

Market looking tired as bond yields wobble

US Treasuries prices eased yesterday in profit-taking from a recent rally that propelled benchmark yields to 16-month lows, although losses were limited as lower stocks maintained some of bonds' safe-haven allure.

The price dip was extended yesterday afternoon following the auction of $16bn (€12.4bn) of 30-year bonds, the last of this week's $74bn (€57.6bn) quarterly Treasury refunding.

Thirty-year bond prices were not hit as hard by the selling after underperforming in the past two sessions in the aftermath of the Federal Reserve's announcement to deploy funds from maturing mortgage holdings to buy government bonds.

"The 30-year sector represents the most value right now. But overall, the market looks tired after the run-up we had the last few days," said Robert Tipp, chief investment strategist with Prudential Fixed Income in Newark, New Jersey.

Benchmark 10-year Treasury notes were yielding 2.73pc yesterday, little changed from the high yield in an auction of $24bn (€18.7bn) of the notes on Wednesday. Ten-year yields touched a 16-month low of 2.68pc on Wednesday as the Fed's policy shift for more stimulus spurred Treasury appetite. (Reuters)

Irish Independent

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