1542 ET – Bond markets send grim signals as Treasury yields rise almost every day of the week, even as equity markets plunged. The unusual combination has been attributed to foreign investors seeking save havens other than U.S. government debt, or to intense hedging, among other factors. Inflation indicators were lower than expected while consumer sentiment keeps weakening. March retail sales and industrial production are due Wednesday, followed by housing starts and weekly jobless claims Thursday. The 10-year yield adds half of a percentage point this week, its largest weekly gain since November 2001, to 4.492%. The two-year rises 0.278 p.p. to 3.950%. (paulo.trevisani@wsj.com; @ptrevisani)
Treasurys Show Tentative Signs of Stability
1432 ET – A tumultuous week in the bond market looks to be ending in modestly positive fashion, with some signs of demand emerging for the long-term bonds that have been at the center of recent selling pressure. In recent trading, the yield on the 30-year U.S. Treasury bond was 4.877%, according to Tradeweb, down about 0.1 percentage point from earlier in the session. Yields, which move in the opposite direction of bond prices, have risen more today on Treasurys that mature in 2 to 7 years. That move was largely driven by data showing rising consumer inflation expectations, which could make it harder for the Federal Reserve to cut interest rates. (sam.goldfarb@wsj.com)
Treasury Yields Extend Gains as Consumer Sentiment Gauge Declines
1046 ET – The 10-year Treasury selloff gains traction after the University of Michigan April preliminary consumer sentiment survey fell more than expected, to 50.8 from 57, sending the yield above 4.5% for the first time since February. Yields have been rising this week as trade wars weaken Treasurys’ safe-haven status. Mild March inflation reports yesterday and today failed to change the trend. Wall Street has been paying more attention to consumer sentiment surveys for more up-to-date signs of how tariffs are impacting the economy. The 10-year yield is at 4.552%. (paulo.trevisani@wsj.com; @ptrevisani)
Treasury Yield Rise Linked to Hedging, Other Factors
0937 ET – Treasury yields have been rising even as stock markets tumble, an unusual combination. Apollo’s Torsten Slok writes that one of the reasons could be foreign investors selling U.S. government securities, since the yen, the euro and the Canadian dollar are strengthening versus the greenback at the same time. He adds that volatility is likely triggering “a lot of hedging activity,” so the rising yields, which imply falling bond prices, could mean “risk reduction among large asset managers.” Leveraged hedge funds may also be unwinding trades, Slok says. Yields are likely rising because of “some combination of these three forces,” he says. The 10-year is at 4.490%. (paulo.trevisani@wsj.com; @ptrevisani)
Treasury Yields Keep Climbing
Yields on longer-term Treasurys were climbing again Friday morning, extending a move that has raised alarms on Wall Street and in the White House this week. The yield on the benchmark 10-year U.S. Treasury note was recently 4.484%, according to Tradeweb, up from 4.392% in Thursday afternoon trading. Yields, which rise when bond prices fall, were choppy overnight but started rising again at the start of U.S. trading. Early Friday, a report showed wholesale inflation was cooler than expected in March. Lower inflation could make it easier for the Federal Reserve to cut interest rates, which would normally boost bond prices. In recent days, however, such news has only been modestly positive for short-term Treasurys, which are especially sensitive to changes in rates. Worried about the unpredictable fallout from President Trump’s tariff policies, investors have been hesitant to buy longer-term Treasurys. That has remained true even after Trump paused many tariffs on Wednesday. (sam.goldfarb@wsj.com)
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