3/14/2017, 1:49 PM (Source: TeleTrader)
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Treasuries trade mixed in anticipation of Fed rate hike

United States government bonds were mixed on Tuesday as investors react to upbeat evidence of economic conditions in the country and expect the Federal Reserve to raise interest rates during its two-day meeting starting today.

Market participants assigned a probability of 90.8% to the event that the US central bank will raise the cost of borrowing in March at 12:25 pm CET, compared to 93% seen the previous day, according to the CME Group's FedWatch Tool. Fixed income investors will also pay attention to today's auction of $55 billion in 4-week bills and $35 billion in 35-day short-term security cash management bills by the US Treasury Department.

The yield on 10-year Treasuries decreased to 2.6039% at 1:44 pm CET, having risen above 2.62% earlier today, approaching its highest level since September 2014. The yield on two-year bonds edged up to 1.3723%, while the yield on 30-year debt declined to 3.188% at the same time. Across the Atlantic, the yield on 10-year German Bunds dropped to 0.46%, while the yield on British gilts of the same maturity eased to 1.245%. Bond yields move in the opposite direction relative to prices.

Baha Breaking News (BBN) / IB