Ten-Year Yield Climbs To Highest Level Since Last March

Treasuries moved to the downside during trading on Friday, extending the decline seen over the course of the previous session.

Bond prices came under pressure in early trading and remained firmly negative throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.2 basis points to 1.200 percent.

With the continued increase on the day, the ten-year yield ended the session at its highest closing level since mid-March of last year.

The weakness among treasuries came as optimism about more fiscal stimulus and an easing of the coronavirus crisis reduced the appeal of safe havens like bonds.

Potentially adding to pressure on lawmakers to pass another relief package, a preliminary report from the University of Michigan showed an unexpected deterioration in U.S. consumer sentiment in the month of February.

The University of Michigan said its consumer sentiment index fell to 76.2 in February after edging down to 79.0 in January. The drop came as a surprise to economists, who had expected the index to inch up to 80.8.

With the unexpected decrease, the consumer sentiment index slid to its lowest level since hitting 74.1 in August of 2020.

Surveys of Consumers chief economist Richard Curtin said the unexpected deterioration in consumer sentiment was concentrated in expectations and among households with incomes below $75,000.

“Households with incomes in the bottom third reported significant setbacks in their current finances, with fewer of these households mentioning recent income gains than anytime since 2014,” Curtin said.

He added, “Presumably a new round of stimulus payments will reduce financial hardships among those with the lowest incomes.”

Following a relatively quiet week on the U.S. economic front, next week’s trading may be impacted by a slew of data, including reports on retail sales, producer prices, industrial production, housing starts, and existing home sales.

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