Treasury yields were little changed, as risk appetite was supported by upbeat corporate earnings, with investors momentarily shaking off some of the geopolitical worries that had underpinned haven-asset buying, including uncertainty surrounding a U.S.-China trade dispute and the possibility of a U.S.-led military strike against Syria.
However, for the week, yields are mostly higher as investors brace for a regime of higher interest rates from the Federal Reserve.
What are yields doing?
The yield on the benchmark 10-year U.S. Treasury note TMUBMUSD10Y, +0.16% rose 0.7 basis point to 2.839%, while the 2-year note yield TMUBMUSD02Y, +0.37% was edged up 0.9 basis point at 2.357%. The 30-year Treasury bond yield TMUBMUSD30Y, +0.01% inched up 0.5 basis point at 3.045%.
For the week, the 10-year yield is up 6 basis points, the 2-year Treasury gained 8.3 basis points, while the 30-year has climbed 2.4 basis points, according to 3 p.m. Eastern Time levels last Friday.
Yields and debt prices move in opposite directions.
What’s driving the market?
Treasury yields climbed Thursday as geopolitical worries faded somewhat, cutting haven-related demand as investors piled back into stocks and other assets perceived as risky. Stocks were headed for modest gains Friday, but analysts said investors might be inclined toward caution ahead of the weekend.
Demand for riskier assets was buoyed Thursday after President Donald Trump appeared to walk back the threat of an imminent military strike on Syria in response to an alleged chemical attack on the rebel-held town of Douma by Syrian President Bashar al-Asad’s forces. The potential for action, however, remains a factor for markets.
The Trump administration is also planning to ratchet up pressure on China by focusing on new tariffs and threatening to block Chinese investment strategy in the U.S.
Trump on Friday was pushing back against allegations in a book by James Comey, the former Federal Bureau of Investigation director, who describes the president as an “unethical” pathological liar and likens him to a mob boss, obsessed with personal loyalty.
On Twitter, Trump called Comey a “leaker and a liar.”
What are analysts saying?
“Investors might prefer to build in somewhat more safety given uncertainty surrounding China and Syria. We continue arguing in favor of consolidation both in the [German] bund and the U.S. note future,” wrote analysts at KBC Bank in Brussels.
What economic data is on tap?
Boston Fed President Eric Rosengren on Friday told the Boston Chamber of Commerce that the central bank might have to tighten monetary policy more aggressively than reflected in the median forecast for the fed-funds rate. The Fed has forecast three rate rises this year and three more in 2019.
St. Louis Fed President James Bullard is set to speak on living standards at Washington University in St. Louis at 9 a.m. Eastern, while Dallas Fed President Rob Kaplan is scheduled to deliver remarks to the Odessa Chamber of Commerce luncheon in Texas at 1 p.m.
The latest consumer sentiment reading for April is due at 10 a.m., with a report on February job openings due at the same time.
What are other markets doing?
The 10-year German bund yield TMBMKDE-10Y, +1.62% edged 0.3 basis point lower to 0.519%.