Treasury 10-year notes (CBOT:ZNM14) rose for a second day and government bonds from Australia to Spain climbed as investors judged if the Federal Reserve’s policy stance will keep global yields subdued.
Five-year notes (CBOT:ZFM14) rose the most in 11 weeks yesterday after Federal Reserve Chair Janet Yellen and policy makers reduced long-term estimates for growth and interest rates, while also cutting monthly debt purchases by $10 billion. Jobless claims fell 6,000 to 312,000 in the week ended June 14, the Labor Department reported today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for 313,000.
“Sovereign bonds are supported as the market was looking for a hawkish touch from the Fed,” said Norbert Aul, a rates strategist in London at Nomura International Plc. There was little change in the Fed’s inflation forecasts “while long-run growth came in lower,” he said. “This combined with Yellen reiterating that rates stay low after tapering concludes provide a dovish sentiment from the Fed.”
Ten-year note yields fell two basis points, or 0.02 percentage point, to 2.57% at 9:06 a.m. New York time, according to Bloomberg Bond Trader prices, after declining by seven basis points yesterday.