23 Dec 2014
US 2-year Treasury yield rises to 3-1/2 year highs
FXStreet (Mumbai) - The surprisingly strong US third quarter GDP report has pushed the yields at the short-end of the treasury market curve at 3-1/2 year highs.
The 2-yr yield, a barometer of short-term interest rate expectations, has gained 2.2 basis points to trade at 0.739%, a level last seen in April 2011. Similarly, the 1-yr yield has gained 0.6 basis points to trade at 0.262%, again a level last seen in April 2011.
Moreover, rising yields at the short-end of the curve indicates that the Treasury market is pricing-in a sooner-than-expected policy normalization in the US. The third quarter annualized US GDP at 5.0% supports the Federal Reserve (Fed) chair Yellen’s statement at Dec. 17 meet that interest rate hike may happen earlier if the economy continues to recover rapidly
US 2-yr yield Technical Levels
The immediate resistance is seen at 0.755%, above which gains could be extended to 0.816%. Meanwhile, support is seen at 0.7% and 0.675% respectively.
The 2-yr yield, a barometer of short-term interest rate expectations, has gained 2.2 basis points to trade at 0.739%, a level last seen in April 2011. Similarly, the 1-yr yield has gained 0.6 basis points to trade at 0.262%, again a level last seen in April 2011.
Moreover, rising yields at the short-end of the curve indicates that the Treasury market is pricing-in a sooner-than-expected policy normalization in the US. The third quarter annualized US GDP at 5.0% supports the Federal Reserve (Fed) chair Yellen’s statement at Dec. 17 meet that interest rate hike may happen earlier if the economy continues to recover rapidly
US 2-yr yield Technical Levels
The immediate resistance is seen at 0.755%, above which gains could be extended to 0.816%. Meanwhile, support is seen at 0.7% and 0.675% respectively.