Treasury Yields Edge Higher for Second Week as Traders Eye Trump

Updated on
  • Traders consider the implications of Trump’s policy actions
  • Fourth-quarter GDP of 1.9% fell short of analysts’ estimates

Treasuries declined for a second straight week as traders weighed the Trump administration’s steps to boost U.S. economic growth.

The benchmark 10-year Treasury yield is up about 2 basis points this week to 2.49 percent as of 4 p.m. in New York, according to Bloomberg Bond Trader data. It reached 2.55 percent Thursday, the highest since December. The U.S. economy grew at a 1.9 percent annualized rate last quarter, less than analysts projected, according to data released Friday. The performance raises the question of whether President Trump will add to that momentum, or curb it should trade tensions flare.

The fourth-quarter figures show that swings in trade can matter: Net exports subtracted 1.7 percentage points from GDP, the most since the second quarter of 2010.

  • On the day, benchmark yields down 1 to 2 basis points across much of the curve after earlier whipsaw on GDP; yield curves flatten slightly
  • Ten-year break-even rate retreats from session highs to end little changed
  • December durable goods orders also missed, falling 0.4 percent compared to expected increase of 2.5 percent
  • CFTC data for week ended Jan. 24 show leveraged funds reduced net short in five-year Treasury futures for a second week, from record level
    • Asset manager net longs in same maturity also declined for second week
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