5 Jan 2015
US Treasury yield curve continues to flatten ahead of Fed minutes
FXStreet (Mumbai) - The yields at the short-end of the curve continue to outperform the ones at the long-end ahead of the Wednesday’s December Federal Reserve minutes release.
The 2-yr yield has inched up 1.2 basis points to trade at 0.681%, while the 10-yr yield has declined 3.2 basis points to trade at 20.91%. On similar lines, the 1-yr yield is up 1 basis points at 0.224% and the 30-yr yield is down 3.7 basis points to 2.658%.
The yields at the short-end, especially the 2-yr yield, which mimics the short-term interest rate expectations, is rising since the markets believe the Fed is on the track to increase the rates in the middle of this year. On the other hand, the 10-yr yield is declining due to the safe haven demand amid rout in oil prices, slowdown in China and Europe and renewed fears of Grexit.
The flattening of the treasury market curve is likely to continue as the December Fed minutes may indicate the Fed is on track to raise rates in 2015.
The 2-yr yield has inched up 1.2 basis points to trade at 0.681%, while the 10-yr yield has declined 3.2 basis points to trade at 20.91%. On similar lines, the 1-yr yield is up 1 basis points at 0.224% and the 30-yr yield is down 3.7 basis points to 2.658%.
The yields at the short-end, especially the 2-yr yield, which mimics the short-term interest rate expectations, is rising since the markets believe the Fed is on the track to increase the rates in the middle of this year. On the other hand, the 10-yr yield is declining due to the safe haven demand amid rout in oil prices, slowdown in China and Europe and renewed fears of Grexit.
The flattening of the treasury market curve is likely to continue as the December Fed minutes may indicate the Fed is on track to raise rates in 2015.