Treasury yields mostly held their ground Wednesday as investors looked ahead to a vote to delay the U.K.’s exit from the European Union, after lawmakers rejected a no-deal arrangement.
The 10-year Treasury note yield TMUBMUSD10Y, +0.52% rose 0.7 basis points to 2.612%, while the two-year note yield TMUBMUSD02Y, +0.33% was mostly unchanged at 2.453%. Both maturities are around their lowest closing levels since Jan. 3. The 30-year bond yield TMUBMUSD30Y, +0.85% gained 2.1 basis points to 3.011%. Bond prices move inversely to yields.
The U.K. 10-year government bond yield rose 2.3 basis points to 1.197%, according to Tradeweb data.
British lawmakers rejected a no-deal Brexit, only a day after Parliament voted against Prime Minister Theresa May’s withdrawal agreement for a second time in the past few months. Parliament will now vote Thursday to delay the U.K.’s exit from the EU by extending Article 50, the legal process by which Britain triggered its departure from the European trade bloc.
“Brexit is really front-and-center. This is going to be an ongoing issue for the marketplace. And we still seem to be very far away from a China trade deal. These geopolitical concerns will cause markets to have a bid, until we get a resolution on either front,” said Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities.
See: Why this week’s Brexit chaos is good for the City
Read: ‘A waste of two years’ — City reacts to crushing defeat of May’s Brexit deal
Market jitters around the eventual outcome of Brexit helped investors take down $16 billion of 30-year bonds, the last debt auction of the week.
So far, this week’s round of debt sales have been well received by investors, who have shown interest in buying bonds as the Federal Reserve stays on hold. Higher interest rates can weigh on prices for government paper, as the higher yields of newly sold debt will result in discounts on existing issuance.
In economic data, durable goods numbers for January rose 0.4%. February’s producer-price index rose 0.1%, below the 0.2% forecast from economists surveyed by MarketWatch.
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