Rates on one-year through 30-year Treasurys remained slightly higher on Monday after the first of two large government auctions.<\/p>\n
What\u2019s happening<\/h2>\n\n- \n The yield on the 2-year Treasury
\n BX:TMUBMUSD02Y<\/a>
\n was 4.720%, up 3.3 basis points from 4.687% on Friday. Yields move in the opposite direction to prices.<\/p>\n<\/li>\n- \n The yield on the 10-year Treasury
\n BX:TMUBMUSD10Y<\/a>
\n was 4.281%, up 2.3 basis points from a one-week low of 4.258% on Friday.<\/p>\n<\/li>\n- \n The yield on the 30-year Treasury
\n BX:TMUBMUSD30Y<\/a>
\n was 4.404%, up 2.5 basis points from 4.379% on Friday. Friday\u2019s level was the lowest for the 30-year rate since Feb. 12.<\/p>\n<\/li>\n<\/ul>\nWhat\u2019s driving markets<\/h2>\n
Treasury\u2019s $63 billion auction of two-year notes<\/a> produced a solid outcome, with indirect bidders being awarded 65.2% versus an average of 62.8%, according to strategist Vail Hartman of BMO Capital Markets. A second large auction, a $64 billion sale of five-year notes, is scheduled for 1 p.m. Eastern time.<\/p>\n\nU.S. data released earlier in the day showed that new-home sales came in below expectations at a seasonally adjusted rate of 661,000 in January<\/a>, versus 651,000 in the prior month. Economists polled by the Wall Street Journal had expected to see a 680,000 rate.<\/p>\nInvestors will now be looking ahead to Wednesday, when the first revision of fourth-quarter U.S. gross domestic product is set to be released, followed the next day by the personal-consumption expenditures price index for last month.<\/p>\n
Analysts expect the core PCE price index, the Federal Reserve\u2019s preferred inflation gauge, to come in at or above economists\u2019 median estimate of 0.4% for January, given stronger-than-expected consumer-price index<\/a> and producer-price index<\/a> reports for the same month.<\/p>\nWhat strategists are saying<\/h2>\n
\u201cThe market remains expectant about the final impact on PCE prices following hot January CPI and PPI inflation,\u201d said Oscar Munoz, chief U.S. macroeconomic strategist for TD Securities. In a note, Munoz wrote that \u201cTD expects those robust increases to result in a solid 0.36% [month-over-month] jump for the core PCE. The PCE\u2019s supercore likely also surged but by an even stronger 0.55%.\u201d<\/p>\n<\/p><\/div>\n<\/div>\n
\n BX:TMUBMUSD02Y<\/a>
\n was 4.720%, up 3.3 basis points from 4.687% on Friday. Yields move in the opposite direction to prices.<\/p>\n<\/li>\n
\n BX:TMUBMUSD10Y<\/a>
\n was 4.281%, up 2.3 basis points from a one-week low of 4.258% on Friday.<\/p>\n<\/li>\n
\n BX:TMUBMUSD30Y<\/a>
\n was 4.404%, up 2.5 basis points from 4.379% on Friday. Friday\u2019s level was the lowest for the 30-year rate since Feb. 12.<\/p>\n<\/li>\n<\/ul>\n
What\u2019s driving markets<\/h2>\n
Treasury\u2019s $63 billion auction of two-year notes<\/a> produced a solid outcome, with indirect bidders being awarded 65.2% versus an average of 62.8%, according to strategist Vail Hartman of BMO Capital Markets. A second large auction, a $64 billion sale of five-year notes, is scheduled for 1 p.m. Eastern time.<\/p>\n U.S. data released earlier in the day showed that new-home sales came in below expectations at a seasonally adjusted rate of 661,000 in January<\/a>, versus 651,000 in the prior month. Economists polled by the Wall Street Journal had expected to see a 680,000 rate.<\/p>\n Investors will now be looking ahead to Wednesday, when the first revision of fourth-quarter U.S. gross domestic product is set to be released, followed the next day by the personal-consumption expenditures price index for last month.<\/p>\n Analysts expect the core PCE price index, the Federal Reserve\u2019s preferred inflation gauge, to come in at or above economists\u2019 median estimate of 0.4% for January, given stronger-than-expected consumer-price index<\/a> and producer-price index<\/a> reports for the same month.<\/p>\n \u201cThe market remains expectant about the final impact on PCE prices following hot January CPI and PPI inflation,\u201d said Oscar Munoz, chief U.S. macroeconomic strategist for TD Securities. In a note, Munoz wrote that \u201cTD expects those robust increases to result in a solid 0.36% [month-over-month] jump for the core PCE. The PCE\u2019s supercore likely also surged but by an even stronger 0.55%.\u201d<\/p>\n<\/p><\/div>\n<\/div>\nWhat strategists are saying<\/h2>\n