U.S. Treasury yields bounce slightly after Monday’s big sell-off in equities
U.S. government debt prices were higher on Tuesday as investors navigated the Evergrande-led sell-off in equities and awaited details from the Federal Reserve's two-day meeting this week.
At 4:00 p.m. ET, the yield on the benchmark 10-year Treasury note rose 1.4 basis points to trade at 1.323% and the yield on the 30-year Treasury bond rose less than 1 basis point to trade at 1.854%. Yields move inversely to prices.
"The bond market is still skeptical that we are not out of the woods," said Rob Daly, Glenmede Investment Management's director of fixed income. "The risks have not gone anywhere. We still have the issues in China, potential global growth fears, the debt ceiling overhang, and a belief the Fed might continue to be dovish and moving slower in the face of these issues."
Treasurys
| TICKER | COMPANY | YIELD | CHANGE |
|---|---|---|---|
| US1M | U.S. 1 Month Treasury | 5.37% | -0.006 |
| US3M | U.S. 3 Month Treasury | 5.397% | -0.007 |
| US6M | U.S. 6 Month Treasury | 5.39% | -0.002 |
| US1Y | U.S. 1 Year Treasury | 5.212% | +0.004 |
| US2Y | U.S. 2 Year Treasury | 4.993% | -0.005 |
| US10Y | U.S. 10 Year Treasury | 4.663% | -0.043 |
| US30Y | U.S. 30 Year Treasury | 4.776% | -0.044 |
On Monday, the 10-year Treasury yield dropped below 1.31% as investors crowded into bonds.
The market sell-off that started Monday comes after China's second-largest developer, Evergrande, is on the brink of collapse. This has raised wider concerns about high levels of debt.
Furthermore, investors are waiting to hear from Fed Chairman Jerome Powell on Wednesday after a two-day meeting. The central bank is expected to give indications about its future rate path.
"The result of the Fed meeting is a huge event tomorrow that could swing bond prices the other way, but the bond market is taking a cautious approach as investors look to the safe haven in the face of these pressures," Daly added.