Treasury yields hold losses after US data, with the 10-year down at 4.927%
The two-year yield fell slightly more than the 10-year, which points to a move across the curve, though earlier dips this autumn have not lasted.
Chart: IEF, seven to ten year Treasuries, which move opposite to yields, one-minute prices, three sessions
Treasury yields were lower in early trading on Friday after US economic data, with the 10-year note down 6.22 basis points at 4.927% and the two-year down 7.05 basis points at 4.586%. The two-year falling a little further than the 10-year says the move is not confined to long bonds.
That matters because long bonds have been where the pressure sits. The 30-year yield reached 5.70% on October 7, its highest since 2002, in a selloff that has run since mid-September. After a $39bn 10-year auction that day the 10-year pulled off its session lows, and the 30-year stayed close to its peak.
The record is not encouraging for anyone hoping this morning's drop marks a turn. The 10-year fell to 5.08% on October 15 and was back above 5.45% the next day, and the pre-market touch of 5.125% on October 16 came with the gap between two- and 10-year yields widening to 35.7 basis points. A parallel fall in both maturities on October 22 did not hold either. Friday's 4.927% is well below those levels, but the pattern says it has to survive more than a few sessions to count.
Falling yields ease the discount rate applied to equities, but relief for valuation-sensitive stocks depends on this move lasting longer than the swings since late September.
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