The yield on US Treasury bonds saw a notable decrease on Friday, following the largest one-month slide in long-term yields in over four years.
Yield Movements
- The yield on the 2-year Treasury (BX:TMUBMUSD02Y) dropped 4.2 basis points to 4.66%. It’s worth noting that yields move inversely to prices.
- The yield on the 10-year Treasury (BX:TMUBMUSD10Y) experienced a decline of 1.7 basis points, settling at 4.32%.
- Similarly, the yield on the 30-year Treasury (BX:TMUBMUSD30Y) decreased by 0.2 basis points to 4.49%.
Factors Influencing the Market
In November, both the 10-year and 30-year yields witnessed the most significant drop since August 2019. The 10-year yield fell by 53 basis points, while the 30-year yield declined by 51 basis points.
The surge in bond performance, coupled with the positive momentum in the stock market, resulted in the best monthly performance for the standard 60/40 model comprising equities and bonds since November 2020. This performance coincided with Pfizer’s announcement of positive news regarding the coronavirus vaccine.
The future trajectory of bond prices will largely depend on monetary policy expectations.
Federal Reserve Chair Jerome Powell will deliver a speech at Spelman College in Atlanta, starting with opening remarks at 11 a.m. Eastern Time, followed by a fireside chat with the school’s president.
Prior to the Powell speech, the Institute for Supply Management’s manufacturing report is scheduled for release. In addition, throughout the day, automakers will be publishing their monthly sales statistics.