Bond Report: Bond yields edge up ahead of consumer confidence report

United States

Bond yields edged up Tuesday, ahead of data that will show how Americans are responding to the rise in inflation.

What’s happening
  • The yield on the 2-year Treasury TMUBMUSD02Y, 3.137% rose 2 basis points to 3.13%. Yields move in the opposite direction to prices.
  • The yield on the 10-year Treasury TMUBMUSD10Y, 3.234% edged up 2 basis points to 3.23%.
  • The yield on the 30-year Treasury TMUBMUSD30Y, 3.342% rose 3 basis points to 3.35%.
What’s driving markets

Monday saw another selloff in the Treasury market, with the yield on the 10-year rising 7 basis points, the largest move in two weeks.

That followed weak demand for an auction of 5-year notes, after surprising strong data on durable-goods orders. There’s an auction of 7-year notes scheduled for Tuesday.

The broader backdrop is that yields have surged this year in response to surging inflation and expectations of further Federal Reserve interest-rate hikes.

Economics data due for release includes the advanced trade in goods report as well as two measures of house prices and the consumer confidence report.

“Given this extreme level of ambiguity, important economic data releases – especially those that contain information about inflation dynamics – will continue to sway market participants,” said analysts at BCA Research.