US 10-year bond yields slump back towards 1.40% after volatile week

  • US bond yields fell sharply on the final trading day of the week.
  • 10-year yields, having hit the mid-1.50s% on Thursday, dropped back to 1.40% on Friday.

After surging all week, US bond yields are seeing a sharp retracement on Friday, as bond-buying ramped up into the close of US trade. The selling is most pronounced at the long-end of the US treasury curve, which has bull flattened sharply; 30-year bonds now down nearly 19bps on the day to just above 2.10%. 10-year yields are down just over 10bps to bang on 1.40%. 2-year yields, which have remained comparatively well-anchored throughout the week and not at one point surpassed the upper end of the Federal fund rate target range (of 0.25%), are down 3bps to just under 0.14%. The 2-year/10-year government bond yield spread (a proxy for curve steepness) is back sharply from Thursday’s highs of above 140bps and is currently around 129 bps. Real US bond yields have plummeted by an even great amount on Friday; the US 10-year TIPS yield, which hit highs of -0.528% on Thursday, is back below -0.7% on Friday.

Market psychology (eagerness to buy the dip following Thursday sharp bond market sell-off) seems to be the predominant driver of price action, again, as fundamentals take the back seat. Indeed, dovish though they have remained, Fed officials have this week refrained from indicating any concern about the recent move higher in US government bond yields, so its not the Fed driving bond yield downside. Despite the drop on Friday, bond yields look set to finish the week a decent amount higher than where they started it; 10-year yields are up about 6bps from Monday’s opening levels around 1.36% and 10-year TIPS yields are up about 7bps from this week’s opening levels just under -0.8%.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Get Weekly Crypto trade ideas!  
Empower yourself with the best market insights

Join FXStreet Premium!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD attempts recovery above 1.1950 as USD resumes decline

EUR/USD is attempting a recovery above 1.1950 ahead of the European open, as the US dollar’s rebound falters amid persistent weakness in the Treasury yields. Easing concerns over EU's covid vaccines rollout and dovish Fed expectations underpin the spot.


GBP/USD recaptures 1.3850 as UK’s optimism offsets USD bounce

GBP/USD rises above 1.3850, picking up fresh bids heading into the London open. The cheers the UK’s advantage of faster vaccinations and unlock guidelines to shrug off the US dollar’s bounce off late the lowest since late March.


XAU/USD buyers attack six-week-old resistance line around $1,780

Gold keeps recovery moves from intraday low to print mild gains, picks up bids off-late. Ascending resistance line from early March tests bulls. 50-day SMA, monthly support line could offer bounces in case of pullback, any further weakness will recall the bears.

Gold News

Bitcoin network hash rate drop may not have caused BTC price crash

China’s prominent regions for Bitcoin mining have suffered an electrical grid blackout, causing Bitcoin’s hash rate to decline. Bitcoin price crashed over the weekend, coinciding with the drop of the network’s hash rate.

Read more

S&P 500 Week Ahead: Banks beat the street, COIN booms as funds flow to ETFs

Equity markets continue to remain bolstered from all sides as the macro environment produces strong numbers, earnings continue to smash estimates and inflation concerns take a back seat. Earnings season switches from bank stocks to reopening plays.

Read more