US Treasury yields edged higher on Thursday as the cash bond market reopened after Wednesday’s Veterans Day closure. The 10-year yield rose 2 basis points to 5.01 percent and the 2-year yield, the tenor most sensitive to Federal Reserve expectations, rose 5 basis points to 4.78 percent, CNBC reported, while the 30-year yield held steady at 5.3503 percent. This site’s market tables had closed the previous session with the 10-year at 5.00 percent, up 1.5 basis points on the day and 10.4 basis points on the week, the 5-year at 4.83 percent and the 30-year at 5.36 percent. By midday the tables put the 10-year at 5.11 percent, up 10.9 basis points on the day, the 5-year at 4.95 percent, up 12.5 basis points, and the 30-year at 5.44 percent, up 8.0 basis points.
The morning levels set up the week’s final supply test. The Treasury sells 25 billion dollars of 30-year bonds at 1:00 p.m. Eastern, closing a refunding whose first two legs both tailed: Monday’s 3-year sale and Tuesday’s 42 billion dollar 10-year sale, which stopped at 5.020 percent with indirect bidders taking 61.2 percent, down from 80.3 percent in October. A third soft result at the long end, where duration supply meets the thinnest natural demand, would extend the week’s message that investors want more yield to fund the deficit at these maturities.
The data calendar runs alongside the auction. October existing home sales are due Thursday, and October producer prices follow on Friday, with a 0.4 percent monthly rise expected in the CNBC report. New York Fed President John Williams speaks this evening, the most senior voice on a crowded day of Federal Reserve appearances, and the first with a full session of post-CPI trading behind him. After Tuesday’s core CPI print at 0.3 percent for a third straight month, fed funds futures treat a December increase as settled and debate only its size; the 30-year result will show whether bond buyers agree at the price on offer.