UPDATE: Treasury yields jump as traders position for higher rates
By Mark DeCambre, MarketWatch
10- and 30-year Treasury yields are up around 7 basis points
U.S. Treasury prices retreated further on Wednesday, driving yields higher, amid a modest increase in appetite for assets perceived as risky, like stocks, and after a speech by Federal Reserve Chairwoman Janet Yellen set the table for one additional rate increase this year.
The markets are pricing in a more than 80% chance of another rate increase in 2017, compared with about 38% a month ago. according to CME Group data (http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html).
What are Treasury yields doing?
The benchmark 10-year Treasury yield rose 7.2 basis point to 2.301%, compared with 2.229% late Tuesday in New York (http://www.marketwatch.com/story/treasury-yields-stabilize-as-traders-brace-for-data-fed-speakers-2017-09-26). The 2-year Treasury note yield, which is more sensitive to shifts in rate expectations, climbed 3.4 basis points to 1.474%. The 30-year bond yield added 6.8 basis points to 2.839%.
What did Yellen say on Tuesday?
In a speech in Cleveland, the Fed boss sai (http://www.marketwatch.com/story/yellen-says-fed-should-be-wary-of-raising-rates-too-gradually-2017-09-26)d "it would be imprudent to keep monetary policy on hold until inflation is back to 2%."
What are the data ahead (http://www.marketwatch.com/economy-politics/calendars/economic)?
An August report for durable-goods orders is slated to arrive at 8:30 a.m. Eastern Time. Economists surveyed by MarketWatch are forecasting an average estimate of 1% growth.
Pending home sales for August are due at 10 a.m. Eastern from the National Association of Realtors. Expectations are for a decline of 0.8%.
What else is the market anticipating?
The Treasury Department and Republican leaders are set to unveil an updated blueprint to cut taxes that could deliver a jolt to bond yields and stocks, if put into law. President Trump has told lawmakers to expect "tremendous" tax cuts for the middle class.
What are other assets doing?
U.S. stock benchmarks look set to rise, with the Dow Jones Industrial Average on track to snap (http://www.marketwatch.com/story/us-stocks-set-to-open-higher-but-nike-nosedives-after-earnings-2017-09-27) a four-session skid, while gold futures, perceived as a haven asset saw a firm drop below $1,300 an ounce. .
Which Fed speakers are on deck?
-Mark DeCambre; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires