Yesterday the price for the 10-year Treasury note ticked down 15/32 to yield 2.212% while the 30-year fell 25/32 to yield 3.367%. Investors reaching out on the yield curve should not be surprised by this downward price action. The Treasury market paid no attention to Standard & Poor’s upward revision, to stable, for the U.S. credit rating. I’d stay away from Treasuries altogether. As Carolyn Cui at The Wall Street Journal reports:
Treasuries held losses despite Standard & Poor’s move to raise its outlook on the U.S. credit rating, as the market continued to grapple with fears that the Federal Reserve will start tapering its stimulus this year.
Credit-rating firm S&P revised its outlook for the U.S.’s rating to stable from negative, citing its resilient economy, monetary credibility and the dollar’s status as the world’s reserve currency. But the firm kept the U.S.’s sovereign credit ratings at “AA+/A-1+.”
The positive news failed to draw cheers from the Treasury TWE.AU -2.50%market, however.
At 3 p.m. EDT, the benchmark 10-year Treasury note was down 15/32 in prices to yield 2.212%. The 30-year-bond fell 25/32 to yield 3.367%. Bond prices move inversely to yields.
Monday’s losses extended the selloff in the Treasury market following Friday’s jobs report, which showed a slightly better number of jobs created in May.