BOND REPORT: Treasurys Little-changed As Investors Await French Election
April 21 2017 - 8:28AM
Dow Jones News
By Sunny Oh
Fed speakers, U.S. economic data are on the docket for
Friday
Treasurys showed little change on Friday as voters prepared to
cast ballots this weekend in the first round of the French
presidential election.
Investors are also looking ahead to a spate of U.S. economic
data, and speeches from Minneapolis Fed President Neel Kashkari and
Fed Vice Chair Stanley Fischer.
The yield for the 10-year Treasury note gained 0.3 basis point
to 2.235%. The yield for the 2-year note edged off 0.4 basis points
to 1.184%, while the 30-year bond rose 0.3 basis point to
2.887%.
Bond prices move in the opposite direction of yields; one basis
point is one hundredth of a percentage point.
The election in France has transformed into what pundits are
calling a tight four-way race, though polls still suggest that
centrist candidate Emmanuel Macron will face off with one of his
euroskeptic rivals in the second round. It's expected that no
candidate will receive 50% of the vote this weekend, the threshold
for winning the race outright. The results will be known by 9 a.m.
Eastern on Sunday.
Both far-left Jean-Luc Melenchon and far-right Marine Le Pen
have taken a critical position on the Eurozone, the former arguing
the economic bloc acts as a conduit for pushing neo-liberal
capitalism to its member countries and the latter promising to
declare a referendum for France to re-negotiate its membership of
the EU.
"Looking at market levels in Europe, there is a big assumption
that Macron makes it into the 2nd round notwithstanding the tight
polls," said Peter Boockvar, chief market analyst for the Lindsey
Group, in a note. "So, stating the obvious, if Macron is in the top
two, stocks rally, euro rises and bond yields jump. We'll also see
a stock rally elsewhere and bonds will selloff with yields
higher."
Yield spreads between 10-year German government bonds and French
government bonds narrowed to 0.694 basis points, the tightest in
two weeks.
Traders are also looking ahead to morning data releases of
Markit's purchasing managers index in the manufacturing and
services sector at 9:45 a.m. Eastern, and existing home sales at
10:00 a.m. The indicators will give a broad overview the economy's
current health.
Minneapolis Fed President Neel Kashkari, a voting member of the
U.S. central bank's monetary policy setting committee will moderate
a discussion at Hamline University in St. Paul, Minneapolis at 9:30
a.m. Fed vice chair Stanley Fischer will give an interview on CNBC
between 11:00 and 11:30 a.m.
(END) Dow Jones Newswires
April 21, 2017 09:13 ET (13:13 GMT)
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