14 Sep 2015
Treasury yields drop, long-end leads the way
FXStreet (Mumbai) - The yield on the short duration and long duration treasury note in the US declined on Monday, indicating the bond market believes the rate hike may not happen on Thursday.
The benchmark Treasury 10-year notes extended their gains into a second day. The 10-year yield currently trades 1.6 basis points lower at 2.167% and the 30-year yield trades 1.3 basis points at 2.931%. The 2-year yield, which mimics short-term rate hike expectations, trades moderately lower at 0.705%.
At the moment, Fed funds futures contracts show the odds of a shift this month have dropped to 30%. The US retail sales report on Tuesday and CPI report on Wednesday may not be able to alter rates hike expectations significantly, especially on the higher side.
The futures also show the probabilities are about 41% for the Fed’s October meeting and 58% for December.
The benchmark Treasury 10-year notes extended their gains into a second day. The 10-year yield currently trades 1.6 basis points lower at 2.167% and the 30-year yield trades 1.3 basis points at 2.931%. The 2-year yield, which mimics short-term rate hike expectations, trades moderately lower at 0.705%.
At the moment, Fed funds futures contracts show the odds of a shift this month have dropped to 30%. The US retail sales report on Tuesday and CPI report on Wednesday may not be able to alter rates hike expectations significantly, especially on the higher side.
The futures also show the probabilities are about 41% for the Fed’s October meeting and 58% for December.