Trading light on US Treasury bonds

Trade was light on Monday morning in US Treasury bonds as investors anticipated the afternoon release of the minutes from the May 3 meeting of the Federal Reserve to see if there were any further clues into the Fed’s view of issues surrounding inflation.

Prices on bonds were sent up on news that the US government would auction only $22 billion of new debt on Wednesday, the smallest amount to be sold in the monthly 2-year auction since the end of 2001.

In late morning trading, 2-year Treasury bonds were yielding 3.637 percent, yields on 10-year bonds were 4.086 percent, and 30-year bonds yielded 4.407 percent. These yields were down 3 to 4 basis points.

Yields were down and prices up on eurozone bonds as well. The 2-year Schatz saw yields drop 2.3 basis points to 2.243 percent. Yields on the 10-year Bund were down 4 basis points to 3.333 percent, and the 30-year Bund was yielding 3.795 at the close of trade, down 4.1 basis points. Earlier in the day, yields on the 30-year Bund had reached 3.785, which was a record low.

Yields on gilts in the UK were also lower with auctions of new paper coming up on Tuesday and Thursday. Yields on the 2-year gilt fell 2.2 basis points to 4.368 percent and the 10-year gilt was down 3.6 basis points to 4.356.

Discuss this in the Finance Markets forums

Story link: Trading light on US Treasury bonds