US Treasury yields rose again on Friday morning, extending a selloff that carried the benchmark curve sharply higher on Thursday and closed with a soft result at the refunding’s final leg. The 10-year yield rose 2 basis points to 5.1271 percent and the 30-year yield rose 3 basis points to 5.4602 percent, CNBC reported, while the 2-year yield eased 1 basis point to 4.8525 percent. Thursday’s closes in this site’s market tables put the 5-year yield at 4.95 percent, up 11.8 basis points on the day, the 10-year at 5.10 percent, up 10.5 basis points, and the 30-year at 5.43 percent, up 7.7 basis points.
The 30-year auction supplied the session’s verdict on demand. The Treasury sold 25 billion dollars of new 30-year bonds at a high yield of 5.441 percent, 0.4 basis points above the 5.437 percent when-issued yield at the deadline, Dow Jones reported. The bid-to-cover ratio fell to 2.36 from 2.54 at the October reopening, indirect bidders took 68.1 percent of competitive awards, down from about 72 percent at the previous sale, and primary dealers were left with 11.4 percent. The new bond carries a 5.375 percent coupon, settles on November 16 and matures on November 15, 2056. It was the third tail in three refunding legs, after Monday’s 3-year sale and Tuesday’s 42 billion dollar 10-year sale.
Reporting on the move attributes Thursday’s jump to the repricing that followed Tuesday’s hotter October consumer price report, higher oil prices, and strengthening expectations of further Federal Reserve tightening, rather than to the auction alone, which landed after most of the day’s rise. No single confirmed driver beyond that combination emerged in this morning’s reporting, and the October producer price report due at 8:30 a.m. Eastern today is the next test.
What is confirmed is the pricing. Traders now see a December rate increase as a near certainty: CME FedWatch put the odds of a hike at the December meeting at 100 percent on Friday morning, split roughly 87 percent for 25 basis points and 13 percent for 50 basis points, CNBC reported. New York Fed President John Williams added his voice on Thursday evening, saying inflation remains far too high and the Fed still has work to do, in remarks covered in a separate story today.
Update, Saturday November 14: Treasuries closed the week higher still on Friday, November 13. This site’s market tables put the 5-year yield at 4.98 percent, up 3.6 basis points on the day, the 10-year at 5.15 percent, up 5.1 basis points and up 29.5 basis points on the week, and the 30-year at 5.48 percent, up 4.8 basis points, all at the November 13 close. Trading Economics put the 10-year at 5.15 percent on Friday, holding a rise of about 30 basis points on the week, and market pricing at the close still showed a December increase as certain, split about 86 percent for 25 basis points and 14 percent for 50 basis points. Friday’s October producer price release, covered in a separate story on this site, did not reverse the move: the monthly rise of 0.3 percent came in below consensus, but the annual rate of 6.5 percent was the largest since November 2022 and the underlying measure rose 0.5 percent for a second straight month.