U.S. Treasury yields lacked direction on early Tuesday as the bond market continued to consolidate at the lower bound of its recent trading range.
What are Treasurys doing?
The 10-year Treasury note yield
BX:TMUBMUSD10Y
was at 1.600%, around the floor of its trading range that has bound the benchmark maturity since mid-March. But the 10-year note briefly fell below that key level last week even after a raft of stronger-than-expected economic data.
The 2-year note rate
BX:TMUBMUSD02Y
was flat at 0.161%, while the 30-year bond rate
BX:TMUBMUSD30Y
was steady at 2.295%.
What’s driving Treasurys?
Bond-market volatility fell even as global equities came under pressure on Tuesday. U.S. stock-market futures were pointing lower early Tuesday, while European equity markets were on track for losses.
With bond traders waiting for the next major catalyst, many were returning their attention to the pace of vaccinations and the trajectory of the COVID-19 pandemic.
An advisory panel for the U.S. Centers for Disease Control and Prevention will meet at the end of this week to make a recommendation on whether the U.S. should resume using the Johnson & Johnson coronavirus vaccine, which was suspended earlier due to worries around side effects.
What did market participants say?
“The U.S. rates markets themselves might have entered a phase of taking stock, not just of domestic developments surrounding the legislative process surrounding the government’s infrastructure plans but perhaps also of more global developments and risks,” said Antoine Bouvet, senior rates strategist at ING.
