BOND REPORT: 2-year Treasury Yield Notches New Decade High As Investors Eye Tax Bill

By Sunny Oh Features Dow Jones Newswires

2-year Treasury yield rise to 1.754%

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Treasury prices fell, pushing up yields on Monday, as the White House signaled its willingness to let lawmakers drop a controversial provision from Senate tax legislation if it would enhance prospects for passage.

What are yields doing?

The 2-year Treasury yield rose 2.6 basis points to 1.754%, the highest since Oct. 14, 2008. The shorter maturity note extended its relentless climb, rising for the eighth day during the past 10 trading sessions.

The benchmark 10-year note yield rose 1.8 basis point to 2.370%. While, the 30-year bond yield was unchanged at 2.789%.

Bond prices move in the opposite direction of yields.

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What's driving markets?

The White House said it would support removing Obamacare repeal language from the bill if necessary for passage after Sen. Susan Collins, a Maine Republican, said she had doubts about the measure (http://www.marketwatch.com/story/republican-collins-still-undecided-on-tax-bill-says-it-needs-changes-2017-11-19). The Republicans can only afford a few dissenters as Republicans only have a small majority in the Senate and the Democrats are expected to vote against the tax plan.

See: Obamacare mandate repeal may not be blow supporters fear (http://www.marketwatch.com/story/obamacare-mandate-repeal-may-not-be-blow-supporters-fear-mueller-interviews-with-white-house-officials-coming-up-2017-11-20)

Read: Future retirees will end up paying for tax cuts (http://www.marketwatch.com/story/why-cut-taxes-in-the-face-of-rising-deficits-2017-11-20)

With little economic data ahead of the release of the Federal Open Market Committee's minutes on Wednesday, investors eyed the geopolitical strains in Germany. Chancellor Angela Merkel was unable to form a majority coalition government, and said she would prefer a general election over the prospect of a minority government.

Check out: Here's what Germany's political turmoil means for global markets (http://www.marketwatch.com/story/heres-what-germanys-political-turmoil-means-for-global-markets-2017-11-20)

What did market participants say?

"Ultimately, if the opposition to the [tax bill] increases, removing the ACA individual mandate repeal and scaling down some of the tax cuts should appease both sides and still beat the alternative of 'new deal'," wrote credit strategists at Deustche Bank.

What else is on investors' radar?

What other markets moved?

European bond yields were lower across the board. The French 10-year government bond shed 1.5 basis point to 0.698%, while the German 10-year government bond yield was unchanged in 0.360%.

(END) Dow Jones Newswires

November 20, 2017 16:17 ET (21:17 GMT)