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US Treasury yield curve steepens

FXStreet (Mumbai) - The yields at the short end of the bond market curve continue to rise faster than those at the long end of the curve, which is steepening the yield curve in the US.

The 30-year yield is trading at 3.069%, up from the day’s low of 3.040%, while the 10-year yield is trading at 2.33%, up from the day’s low of 2.295%. Meanwhile, the two-year yield is trading at 0.49%, up from the day’s low of 0.473%. Moreover, the losses in the short-term bond prices have been higher than those of the long-term bonds.

The yields declined yesterday, ending a two-day rally a report showed U.S. growth was boosted in the third quarter by a surge in defense spending. Moreover, the yields declined because the upbeat GDP report was mainly driven by the defense spending. The Fed will continue to drag its feet, not tighten, even though people think the Fed is ready to tighten.", said Tom di Galoma, head of rates and credit trading at the ED&F Man in New York.

The Treasury yields may inch higher today if the equity markets in the US extend rally, thereby reducing the safe haven appeal of the Treasuries.

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