U.S. Government Bonds Wipe Out Early Gains; Treasury Note Auction Shows Interest from Indirect Bidders, Often a Sign of Interest from Abroad
Early gains in U.S. Treasurys evaporated Wednesday as investors balanced choppy growth signals abroad with the economic progress being made at home.</br></br>In late afternoon trading, benchmark 10-year notes were unchanged in price to yield 2.359%. The 30-year bond erased gains to trade flat, yielding 3.094%. Bond yields decline when prices rise.</br></br>The sideways drift kept the market in the tight range it has established since the start of the month. Bond investors have faced dueling forces of decent U.S. economic signals and uncertainties abroad, leaving the 10-year yield in a 2.27% to 2.40% range.</br></br>While some bond analysts say U.S. economic conditions and the end of the Federal Reserve's active bond purchases would typically warrant higher yields, offsetting policies overseas are capping global bond yields, including those on U.S. Treasurys.</br></br>The European Central Bank "is helping the dollar and dollar-denominated securities by pledging to keep pushing their rates down to a level that stimulates the economies of the eurozone," said Kevin Giddis, head of fixed-income capital markets at Raymond James. "With inflation as a current nonfactor, investors will likely continue to add Treasurys to their portfolios."