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Treasury yields several inches lower amid caution on omicron

US Treasury yields edged lower on Friday morning, as investors remained cautious about the spread of the omicron variation.

Return on benchmark 10-year Treasury bond saw little volatility, falling slightly to 1,4208% at 3:30 a.m. ET. Productivity per 30-year Treasury bond fell less than one basis point to 1.8538%. Yields move inversely with price and 1 basis point equals 0.01%.

The spread of the Covid omicron variant continues to weigh on investor sentiment. The UK reported a record number of daily cases on Thursday – with almost 90,000 infections.

The Federal Reserve’s more aggressive monetary policy also continues to attract investors’ attention. The Fed said on Wednesday that it would accelerate its reduction in monthly bond purchases and indicated that it was considering a rate hike in 2022.

Simon Lue-Fong, head of fixed income at Vontobel Asset Management, told CNBC “Squaw Box Europe“on Friday that he believes central banks will continue to ‘go behind the curve’ in their monetary policy moves.

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“And I think, therefore, the market is feeling relatively comfortable about central banks like the Fed … in a way that goes to the curve of what the market is thinking,” Lue-Fong said.

He explained that this is the reason for the less “aggressive” moves in the bond market, as a lot of this action is already priced in and indeed “central banks have gone behind the curve”. .

Fed Governor Christopher Waller will speak on the economic outlook at the New York Forecast Club event at 1 p.m. Friday.

No major economic data will be released on Friday.

An auction is scheduled to be held on Friday for $60 billion of the 23-day bills.

https://www.cnbc.com/2021/12/17/us-bonds-treasury-yields-inch-lower-amid-caution-over-omicron.html Treasury yields several inches lower amid caution on omicron

Sunbiz

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