Long-end yields slip ahead of pre-holiday Fed minutes and data

Bond yields were mixed on Wednesday, as investors waited for the minutes of the latest Federal Open Market Committee meeting and a big batch of economic data ahead of the Thanksgiving Day holiday.

What’s happening?
  • The yield on the 2-year Treasury note
    rose 2 basis point to 4.529%. Yields move in the opposite direction to prices.

  • The yield on the 10-year Treasury note
    fell 7 basis points to 3.755%.

  • The yield on the 30-year Treasury note
    was down 9 basis points to 3.813%,

What’s driving markets?

Longer-dated Treasury notes were slipping a day after concerns about additional China COVID-19 lockdowns increased global growth concerns.

The spread between 2- and 10-year Treasury yields ended the New York session at minus 76 basis points, its most inverted level since Oct. 5, 1981, and a sign that some say points to an inevitable recession.

Investors will be looking for clues as to the Fed’s thinking on interest rates and inflation when the minutes of the November meeting, in which the central bank hiked its rate by 0.75 percentage points to a range of 3.75% to 4%. will be released at 2 p.m. Eastern Time.

“The tone of the minutes is likely to suggest further rate hikes, potentially encouraging some bear flattening of the curve,” said strategists at TD Securities.

Wednesday will also bring durable goods for October and initial jobless claims due at 8:30 a.m., followed by the flash S&P U.S. manufacturing and services purchasing managers indexes at 9:45 a.m. The University of Michigan’s final November consumer sentiment index and five-year inflation expectations are due at 10 a.m., alongside October new home sales.

U.S. stock exchanges will be closed for Thanksgiving Day on Thursday, Nov. 24, and will reopen the next day only for an abbreviated session on Black Friday, with trading ending at 1 p.m. Eastern on Nov. 25.

The bond market will be closed for Thanksgiving Day, alongside U.S. stock exchanges on Thursday, Nov. 24, and reopen the next day for an abbreviated session. Stock trading will end at 1 p.m. Eastern on Nov. 25 and the bond market will close an hour at 2 p.m.