BOND REPORT: Treasurys Finish Flat After Volatile August
August 31 2015 - 4:46PM
Dow Jones News
By Joseph Adinolfi, MarketWatch
Yields finish Monday's session lower
The 10-year Treasurys finished August flat as investors dumped
bonds in the final hours of Monday's trading session on renewed
expectations that Federal Reserve policy makers might raise
interest rates at their next meeting.
The yield on the benchmark 10-year note finished the month 0.3
basis point lower at 2.213%. Meanwhile, the yield on the two-year
note rose 6.3 basis points to finish August at 0.739% -- its
largest one-month yield gain since February.
Comments by Federal Reserve policy makers made during last
week's annual summit in Jackson Hole, Wyo. hinted at a readiness to
begin raising interest rates this year.
Federal Reserve Vice Chairman Stanley Fischer, who spoke at the
summit on Saturday, said he was confident inflation would soon rise
toward the Fed's 2% target as the economy adjusts to a stronger
dollar and lower commodity prices. However, he didn't say anything
definitive about the likelihood of an increase at the Fed's
September meeting.
"Even if it's not September, it certainly seems like the Fed
wants to move this year," said Larry Milstein, managing director of
government and agency trading at R.W. Pressprich & Co.
Analysts were looking ahead to Friday's nonfarm payrolls report
for August--the last major piece of economic data expected before
the next meeting of the Federal Reserve's rate-setting committee,
which begins on Sept. 16.
Read: Fed watching China closely, Fischer says
(http://www.marketwatch.com/story/fed-watching-china-closely-fischer-says-2015-08-29)
Read: Treasury yields see largest one-week rise since June
(http://www.marketwatch.com/story/treasury-yields-fall-after-a-weak-reading-on-us-inflation-2015-08-28)
The Treasury market saw some unusually volatile moves for
August, a month which usually features relatively calm trading.
Yields recorded their largest
(http://www.marketwatch.com/story/treasury-yields-fall-after-a-weak-reading-on-us-inflation-2015-08-28)
one-week rise since June last week.
Demand for longer-dated bonds has been particularly intense
during the final trading session of August, but markets overcame a
wave of early buying to finish Monday's session lower, said Ian
Lyngen, senior rates strategist at CRT Capital Group LLC.
Lyngen said in a note to clients that volatility in Monday's
session was about a third of last week's levels.
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(END) Dow Jones Newswires
August 31, 2015 17:31 ET (21:31 GMT)
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