U.S. Treasury yields were higher on trading early Wednesday as investors looked forward to the inauguration of President Joe Biden.
What do Treasurys do?
Yield of 10-year financial note TMUBMUSD10Y,
gained 0.7 basis points to 1.099%, while the 2-year note rate was TMUBMUSD02Y,
it went up 0.4 point to 0.135%. Yield 30-year bonds TMUBMUSD30Y,
0.8 basis points to 1.847%.
What drives Treasurys?
Biden is expected to begin at 12pm ET Wednesday, calling for a halt to President Donald Trump’s tenure in the White House. Bond traders are keeping a close eye on the priorities of his new administration which is looking to see if his policies could lift upward tensions in the U.S. economy.
See: Biden aims for the best stock market rally in 92 years before its inception
But market sales earlier this month, fueled by fears of fiscal stimulus, have struggled to recover. Markets are now showing signs of consolidation, with 10-year Treasury yields hovering around 1.10%.
An auction for $ 24 billion of 20-year bonds could offer some capital to trade. Recent auctions from the Treasury have seen strong demand from bond buyers looking to take advantage of the recent yield hike.
In the US economic data, the National Association of Home Builders releases the index of housing market activity at 10 am ET.
What did market participants say?
“For the next 20 years we expect good demand as the market has settled in after the substantial backlash to start the year,” said Justin Lederer, Cantor Fitzgerald’s flat rate strategy.