US Treasuries (UST) Market

The US Treasury market witnessed a bloodbath with the curve rising 6 bps to 24bps.

The closely watched 10-year UST yield shot up around 18.4 bps to 1.52%, marking its highest in one year. The selling pressure came after a slew of economic data release reinforced US economic recovery acceleration compounded by tepid demand in a seven-year Treasury auction, which overshadowed Powell’s efforts to soothe the market’s concerns over the recent run-up in inflation expectations.

The seven-year note Us$62bil auction results were poor after it tailed by 4.2 bps, the most in the auction’s history. The 10-year/two-year spread widened to 135bps – the highest since April 2017 – while the 30Y/5Y spread expanded to 145bps.

As of noon Friday, the 2-, 5-, 10- and 30-year benchmark UST yields stood at 0.15%, 0.78%, 1.48% and 2.25%, respectively.