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27 Jan 2015
US Treasury yield curve flattens ahead of the FOMC meet
FXStreet (Mumbai) - The yields at the long-end of the treasury market curve fell sharply, outdoing the fall at the short-end of the curve after sharp fall in durable goods data and weak corporate earnings raised questions regarding the economic recovery in the US.
At the time of writing, the 10-year yield was down 6.7 basis points (bps) at 1.76%, while the 30-year yield was down 6.5 bps at 2.334%. At the short-end, the 2-year yield was down 2.9 bps at 0.494%, while 1-yr yield was down 1.2 bps at 0.145%.
The yields came under pressure after the data showed the Durable goods orders fell 3.4% in December, while core orders declined 0.6% in December. Meanwhile, weak corporate performance pushed the major equity index futures sharply lower. The DJIA currently trades 300 points to 1.7% lower at 17,378.50 levels.
Moreover, the surprisingly strong US January consumer confidence data; at Aug. 2007 high; failed to calm market nerves. On similar lines a sharp rise in New homes sales figure failed to trigger a recovery in the yields.
The Treasury yields may remain under pressure as weak data, a day ahead of the FOMC decision, has triggered speculation that the Federal Reserve would delay the interest rate hike in light of the recent weakness in the economic data.
At the time of writing, the 10-year yield was down 6.7 basis points (bps) at 1.76%, while the 30-year yield was down 6.5 bps at 2.334%. At the short-end, the 2-year yield was down 2.9 bps at 0.494%, while 1-yr yield was down 1.2 bps at 0.145%.
The yields came under pressure after the data showed the Durable goods orders fell 3.4% in December, while core orders declined 0.6% in December. Meanwhile, weak corporate performance pushed the major equity index futures sharply lower. The DJIA currently trades 300 points to 1.7% lower at 17,378.50 levels.
Moreover, the surprisingly strong US January consumer confidence data; at Aug. 2007 high; failed to calm market nerves. On similar lines a sharp rise in New homes sales figure failed to trigger a recovery in the yields.
The Treasury yields may remain under pressure as weak data, a day ahead of the FOMC decision, has triggered speculation that the Federal Reserve would delay the interest rate hike in light of the recent weakness in the economic data.