BOND REPORT: Treasury Yields Slightly Lower Ahead Of Debt Auctions

By Sunny Oh Features Dow Jones Newswires

Treasury yields ticked lower on Monday as investors braced for a pair of debt auctions that could set the tone for the rest of the trading session.

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What are Treasury yields doing?

The benchmark 10-year Treasury yield was down 1.2 basis points to 2.330%. The 2-year note yield was virtually unchanged at 1.753%. The 30-year bond yield shed 1.8 basis point to 2.747%.

Bond prices move in the opposite direction of yields.

What's driving markets?

Bond investors will prepare for a back-to-back auction of 2-year notes at 11:30 a.m. Eastern and 5-year notes at 1 p.m. The central bank's uninterrupted schedule of interest rate hikes in the face of tepid inflation has kept market participants away from short-dated government paper, whose value has faced gradual erosion. The 2-year yield has risen more than half a percentage point since early September.

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With the House passing its own version of the tax plan, the Senate Republican's aim to put their own bill to the vote by the end of this week. But with a slim majority in the Senate, concerns that defections from the GOP could scuttle the bill have kindled uncertainty.

What did market participants say?

"Until the FOMC signals that the conspicuous absence of inflation is troubling enough to warrant a pause in the tightening campaign, we're content to view the front-end of the curve as convincingly in a bear market," said Ian Lyngen and Aaron Kohli, fixed-income strategists for BMO Capital Markets. The FOMC is the Federal Open Market Committee, the Fed's rate-setting panel.

What else is on investors' radar?

Investors will take a look at October's new home sales data at 10 a.m. Eastern, which are forecast to come in at 667,000. The Dallas Fed's manufacturing survey, a gauge of regional industrial activity, is set for release at 10:30 a.m.

Minneapolis Fed President Neel Kashkari, voting member, will appear in a moderated question and answer session in Winona, Minn., at 6:30 p.m. Eastern New York Fed President William Dudley will speak about the U.S. economy at 7 p.m. Eastern Market participants say they will likely reaffirm the central bank's commitment to one more rate increase this year.

(END) Dow Jones Newswires

November 27, 2017 08:54 ET (13:54 GMT)