U.S. Treasuries were churned in an overall lower range in light trade late Friday, waddling into the early close with middling losses within a fairly tight range in the holiday-shortened week. The market continued to get hit with prices near the highest yield/lowest price levels since 2009 on the two-years, 2011 on the five-years and mid-2015 on the 10s. The week ahead starts slow but action picks up midweek and is capped with the November employment report.
The 30-year was the best performer, eking out a gain to settle near 3.0165% from an overnight low at 3.0635% and a close near 3.025% close Wednesday. The 10-year is near 2.367% having fallen to 2.414% from a 2.355% close. The five-year is near 1.845% from a drop to 1.908% and 1.84% Wednesday. The two-year is near 1.13% from 1.174% overnight and 1.135% Wednesday.
The curve trade was mixed late with the yield differential between the two- and 10-years steepened to near 1.23 plus after an early narrowing and from a close near 1.22. The five- and 30-year yield spread remained on a flatter slope, tightened to 1.17 from 1.18 plus Wednesday.
The week ahead offers no Treasury coupons, but participants are anticipating a hefty run of corporate supply coming into play into year-end. Event risk through the week has Q3 gross domestic product, consumer confidence as well as a run of housing and manufacturing data. The Beige Book is out Wednesday in advance of the Dec. 13 – 14 Federal Open Market Committee meeting.
High end Fedspeakers litter the calendar with Vice Chair Stanley FIscher and New York President WIlliam Dudley on Tuesday. Governors Jerome Powell and Daniel Tarullo speak Wednesday and Friday, respectively.
Economic reports showed the trade deficit widened in October as exports dropped. The flash Markit services purchasing managers’ index saw the 9th straight month of expansion in November.
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