BOND REPORT: Treasury Yields Rise A 4th Day In A Row Ahead Of Fed Decision

By Sunny Oh Features Dow Jones Newswires

Treasury yields on Monday headed higher, adding to a three-day streak of gains, ahead of the closely watched two-day Federal Reserve meeting set to begin Tuesday, which could be influential for investors in government paper.

Continue Reading Below

The yield for the 10-year note rose 1.7 basis point to 2.215%. Bond prices move inversely to yields; one basis point is one hundredth of a percentage point.

The 2-year note gained 1.6 basis point to 1.355, while the 30-year bond, or the long bond, added 1.8 basis point to 2.867%.

Elsewhere, the euroskeptic 5 Star Movement suffered a setback across local elections, after having received the second most votes in the 2013 general election. The municipal results helped to relieve some geopolitical concerns over the eurozone's viability much in the same way the loss of the far-right Marine Le Pen in the French Presidential Election did back in May.

Investors expect the Fed to deliver a quarter-point rate increase, but investors will be closely following the pace of rate increases thereafter, with the likelihood of fifth rate hike since Dec. 2015 hovering below 50%, according to the Chicago Mercantile Exchange's data, as been seen weakening the case for an accelerated pace of monetary-policy tepid tightening.

"This party was the markets biggest fear whether an election is called early for this fall or continues as is next year. The political worries for the region entering the year have basically been neutered," said Peter Boockvar, chief market analyst for the Lindsey Group, in a note.

Continue Reading Below

Looking ahead, Traders will mostly focus on an auction of $30.59 billion worth of 10-year Treasury notes Monday at 1 p.m. Eastern. Sales of U.S. government paper can influence trading in the outstanding market. But strategists said they didn't expect enthusiastic bidding.

The 10-year Italian benchmark government bond experienced a relief rally, slipping 7.2 basis points, its lowest levels since January.

(END) Dow Jones Newswires

June 12, 2017 09:56 ET (13:56 GMT)