Technical indicator shows notes were most oversold in 26 years
Daiwa SB, Mirae say it’s not yet time to buy Treasuries
Nov. 15, 2016 (Bloomberg) -- Treasuries rose as investors questioned how much extra spending President-elect Donald Trump will be able to implement, halting a selloff that put global bonds on track for their worst month in 13 years.
U.S. 30-year yields surged past 3 percent Monday, fueling speculation the level is high enough to compensate investors for a pickup in inflation expectations and forecasts for the Federal Reserve to raise interest rates next month. A technical indicator showed 10-year Treasuries were the most oversold since 1990.
“To promote an even greater selloff in yields we’re going to need to see actual inflation pushing up, actual growth being more positive, and some of these policies that Trump has proposed being put in place,” said Peter Jolly, head of market research at National Australia Bank Ltd. in Sydney. “I don’t think we’re finished seeing, necessarily, the end of the selloff.”
The U.S. 30-year bond yield fell four basis points, or 0.04 percentage point, to 2.97 percent as of 7:04 a.m. in New York, based on Bloomberg Bond Trader data. The price of the 2.875 percent security due in November 2046 rose 27/32, or $8.44 per $1,000 face amount, to 98 5/32. Ten-year yields dropped five basis points to 2.22 percent.