BOND REPORT: 10-year Treasury Yield Falls Ahead Of Home Sales Data
November 21 2017 - 8:19AM
Dow Jones News
By Sunny Oh
The benchmark 10-year Treasury note price rose on Tuesday,
pulling down the yield, ahead of a key home sales number that could
give investors a snapshot of inflationary pressures from the
housing market.
What are yields doing?
The 10-year Treasury yield fell 1.6 basis point to 2.354%. The
2-year yield was slightly up at 1.763%, versus 1.754% late Monday,
while the 30-year bond yield was down 3 basis points to 2.758%.
Bond prices move in the opposite direction of yields.
What's driving markets?
Investors will eye existing home sales data out on 10 a.m.
Eastern, which could set the tone for the rest of the trading
session. Housing and rental prices are an important component of
inflation measures. A strong number could raise the outlook for
stronger inflationary pressures running into next year.
The European Central Bank will make small touches to the
language of the policy statement instead of significant revisions
when it ends its bond-buying program next year, reported Bloomberg
(https://www.bloomberg.com/news/articles/2017-11-20/ecb-is-said-likely-to-take-small-steps-in-guidance-on-qe-exit-ja8jwyf5).
Also, the minutes from the ECB's October meeting is set for release
on Thursday and give investors' clarity on its decision to taper
its asset purchases beginning from next year.
What did market participants say?
"Housing is not as glaringly affordable as it was a few years
ago, and we are starting to see some later-cycle behavior on this
front," said Robert Kavcic, senior economist with BMO Capital
Markets.
What else is on investors' radar?
The Chicago Fed national Activity Index rose to 0.65 in October,
from 0.36 in September. Values above 0.70 have tended to mark a
period of a sustained rise in inflation.
Federal Reserve Chairwoman Janet Yellen will give a talk at New
York University at 6 p.m. Eastern. She said she would resign from
the Fed's Board of Governors
(http://www.marketwatch.com/story/janet-yellen-announces-shes-leaving-the-fed-2017-11-20)when
her tenure as Fed chief comes to an end in February. Though her
departure was expected, the rising vacancies on the Board adds
uncertainty to how central bank policy will pan out in 2018.
What are other assets doing?
European government bonds extended its rally, kick-started by
(http://www.marketwatch.com/story/heres-what-germanys-political-turmoil-means-for-global-markets-2017-11-20)
German Chancellor Angela Merkel's failure to form a majority
coalition. The German 10-year government bond yield fell 1.4 basis
points to 0.351%. The French 10-year yield fell 4.4 basis points to
0.658%.
(END) Dow Jones Newswires
November 21, 2017 09:04 ET (14:04 GMT)
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