US Treasurys whipsaw amid election, Fed jitters
U.S. government debt prices whipsawed on Tuesday, as investors awaited new developments coming out of leading central banks, amid uncertainty surrounding the U.S. election.
The yield on the benchmark 10-year Treasury note last rose to 1.8302 percent, while the yield on the 30-year Treasury bond was also up at 2.5796 percent. Bond yields move inversely to prices.
Treasurys
| TICKER | COMPANY | YIELD | CHANGE |
|---|---|---|---|
| US1M | U.S. 1 Month Treasury | 5.37% | UNCH |
| US3M | U.S. 3 Month Treasury | 5.391% | UNCH |
| US6M | U.S. 6 Month Treasury | 5.381% | -0.001 |
| US1Y | U.S. 1 Year Treasury | 5.171% | -0.012 |
| US2Y | U.S. 2 Year Treasury | 4.842% | -0.026 |
| US10Y | U.S. 10 Year Treasury | 4.471% | -0.033 |
| US30Y | U.S. 30 Year Treasury | 4.615% | -0.031 |
The Federal Open Market Committee is expected to kick off the first day of its two-day monetary policy meeting on Tuesday. Investors will be keeping an ear out for what the central bank thinks of the U.S. economy and for any hints on the next interest rate hike.
While bond markets are set to focus on key data, auctions and news out of leading central banks, all of this could be overshadowed by news emerging out of the U.S. election. On Friday, the FBI announced that it was reviewing new evidence in connection with its investigation of Hillary Clinton's email server.
On Monday, a former bureau official told CNBC that FBI Director James Comey opposed accusing Russia of meddling in the U.S. election, with Comey arguing privately that it was too close to Election Day.
Elsewhere, the Bank of Japan refrained from broadening its monetary stimulus at the conclusion of a two-day meeting on Tuesday, keeping its rates on hold and 10-year government bond yield target unchanged. The Reserve Bank of Australia also kept its rates on hold at its meeting.
Investors are also expected to keep a close eye on Europe this Thursday, as the Bank of England announces its latest monetary policy decision. The central bank is also set to publish its latest inflation report. On Monday night, Governor Mark Carney said he would stay in his position for an extra year until the end of June 2019, despite early reports stating otherwise.
Bond prices were also under pressure across Europe. The yield on the German 10-year bund surged to 0.176 percent, its highest level since May. The yield on the French 10-year note climbed to 0.5080 percent, above its 0.4532 percent close on June 23 before the U.K. vote to leave the European Union.
In economic news, the October read on the Markit manufacturing PMI came in at 53.4, above September's number of 51.5. The ISM manufacturing index for October met expectations at 51.9, while construction spending data for September missed consensus.
Meanwhile in oil, prices fell on Tuesday, with U.S. crude settling down 19 cents at $46.67 a barrel.