Treasury Yields Rise as Attention Shifts to November Auction Sizes
Treasury yields rose on Monday as investors shifted their focus to the size of the upcoming November auctions. The 10-year yield climbed to its highest level since mid-September, while the 30-year yield rose to its highest level since late August.
Market Overview
The yield on the benchmark 10-year Treasury note rose to 0.845%, up from 0.817% on Friday. The yield on the 30-year Treasury bond rose to 1.571%, up from 1.541% on Friday.
The yield on the two-year Treasury note rose to 0.157%, up from 0.152% on Friday. The yield on the three-month Treasury bill rose to 0.037%, up from 0.035% on Friday.
Auction Sizes
The focus of the market shifted to the size of the upcoming November auctions. The Treasury Department is expected to announce the sizes of the auctions later this week.
The Treasury is expected to announce the size of the three-year note auction on Tuesday, the 10-year note auction on Wednesday, and the 30-year bond auction on Thursday.
The Treasury is expected to announce the size of the two-year note auction on Friday. The Treasury is also expected to announce the size of the three-month bill auction on Friday.
Market Reaction
The market reacted to the news of the upcoming auctions. Investors are expecting the Treasury to announce larger auction sizes than in previous months.
The larger auction sizes could lead to higher yields as investors demand higher yields to compensate for the increased supply of debt.
Rising Yields
The yield on the 10-year Treasury note has risen steadily since the beginning of October. The yield on the 10-year note is up from 0.637% on October 1 to 0.845% on Monday.
The yield on the 30-year Treasury bond has also risen steadily since the beginning of October. The yield on the 30-year bond is up from 1.347% on October 1 to 1.571% on Monday.
Risk Appetite
The rise in yields has been driven by an increase in risk appetite. Investors have become more willing to take on risk as the economic outlook has improved.
The improving economic outlook has been driven by the rollout of vaccines and the passage of additional stimulus measures.
Fed Policy
The Federal Reserve has also played a role in the rise in yields. The Fed has kept interest rates near zero and has been buying bonds in an effort to keep borrowing costs low.
However, the Fed has signaled that it is willing to allow yields to rise as the economy improves. The Fed has also signaled that it is willing to allow inflation to rise above its 2% target.
Outlook
The outlook for Treasury yields remains uncertain. The size of the upcoming auctions will be a key factor in determining the direction of yields.
The market will also be watching for any changes in the Fed’s policy. The Fed’s willingness to allow yields to rise and inflation to rise above its 2% target will be a key factor in determining the direction of yields.
Overall, the outlook for Treasury yields remains uncertain. Investors will be watching the size of the upcoming auctions and the Fed’s policy closely in the coming weeks.