Treasury yields were subdued on Friday as investors awaited the final version of the Republican tax bill, which is set for unveiling later in the day.
What are Treasurys doing?
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The 10-year benchmark Treasury yield rose to 2.357%, from 2.346% on late Thursday. The 2-year note yield ticked higher to 1.824%, versus 1.811%. The 30-year bond yield was flat at 2.710%.
Bond prices move in the opposite direction of yields.
What's driving markets?
Investors watched the progress of the tax bill. Republican lawmakers are expected to unveil the final bill on Friday and vote next week so it can be passed by the end of the year. But even as the tax cuts come closer to fruition, bond markets have been tame compared with the earlier selloff seen during President Donald Trump's election victory a year ago, when expectation for pro-growth fiscal policy catapulted long-term bond yields.
Analysts nonetheless have shown trepidation over the bill's impact on government bond rates. A deficit-widening tax cut would push the federal government to increase debt issuance, a move that would introduce competing debt on to the market, undercutting demand for exiting issues.
What did strategist say?
"Interest rates also seem underwhelmed by the 2018 impact of the tax bill. Whatever grade you assign to the end result, the bond market and economists are adding an extra 'minus' to the grade. So, if you think it's a B effort, the market's grade is a B minus. Rate trajectory is well below what we charted for getting this close to the goal line, partly due to the Byzantine compromises traded in exchange for something that resembles revenue neutrality versus a 10-year measuring period," said Jim Vogel, an interest-rate strategist at FTN Financial.
What else is on investors' radar?
Industrial production data for November is set to come out at 9:15 a.m. Eastern. Economists surveyed by MarketWatch are forecasting an 0.4% gain. The Empire State manufacturing index, a gauge of local economic activity, slipped to 18.
What other assets are on the move?
Portuguese bond yields fell on anticipation that Fitch Ratings would upgrade the country's bonds, lifting it to investment-grade status. This follows S&P Global's decision to raise the country's rating out of so-called junk level on Sep. 15. The 10-year Portuguese bond yield fell 5.4 basis points to 1.759%.
(END) Dow Jones Newswires
December 15, 2017 08:55 ET (13:55 GMT)