BOND REPORT: Treasury Yields Lower As Investors Look Ahead To ECB Press Conference

By FeaturesDow Jones Newswires

The European Central Bank kept monetary policy unchanged

Treasury yields were lower Thursday as investors looked ahead to the European Central Bank's press conference where President Mario Draghi is likely to field questions when the ECB will end its asset-purchasing program sooner rather than later.

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How are Treasurys performing?

The yield for the benchmark 10-year Treasury note fell 1.7 basis point to 2.637%. The 2-year note rate was slightly lower 0.4 basis point to 2.080%. The 30-year bond yield was down 1.7 basis point to 2.920%.

Bond prices move inversely to yields.

What's driving markets?

As expected, the ECB kept monetary policy unchanged. The bank said it would leave interest rates at current levels "well past" the end of its asset-purchase program, set to finish in September. Investors are gearing up for the press conference where ECB President Mario Draghi is likely to insist on the need for monetary policy to stay accommodative until inflation nears the central bank's target of 2%.

Inflation, though improving, was relatively muted. In December, the central bank said they expected inflation to rise to 1.4% in 2018.

See: ECB leaves monetary policy unchanged (http://www.marketwatch.com/story/ecb-leaves-monetary-policy-unchanged-2018-01-25)

What are market participants saying?

"[Draghi's] job will be to make it perfectly clear, in no uncertain terms, that the ECB's asset purchases will continue at least through September, and longer if necessary, to achieve and sustain inflation metrics at or just above 2%," said Carl Weinberg, chief economist for High Frequency Economics.

What else is on investors' radar?

New home sales is set for release at 10 a.m. Eastern. Economists surveyed by MarketWatch are forecasting a 680,000 for December. Weekly Jobless claims will come out at 8: 30 a.m.

The Treasury Department will unload $28 billion of 7-year notes at 1 p.m. Trading for government paper can be swayed by an influx of fresh debt onto the market.

What are other assets doing?

European government bonds were slightly lower from Wednesday's close. The German 10-year bond yield was down 1.6 basis points to 0.512%, while the French 10-year bond yield fell 2.1 basis points to 0.847%, according to Tradeweb.

(END) Dow Jones Newswires

January 25, 2018 08:22 ET (13:22 GMT)

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