Bond Prices Extend Gains

U.S. Treasury prices continued to rise as ongoing geopolitical issues drew safe-haven buying with the latest reports of smoke rising from near the Moscow airport. Treasury supply is being eyed with caution, with the past six sales having seen mixed results, although the March auction went very well. The subpar three-year sale Monday and lack of concession in today’s trade has some leaning pessimistic, although foreign buyers are expected to continue to take over half the offering.

The 30-year recently traded near 2.9545% from a 2.953% low yield, 2.9837% high and 2.985% close Monday. The 10-year is near the low yield at 2.3232% versus a 2.3573% high yield and 2.36% close. The five-year is near the session low yield of 1.8534% from a 1.8932% high and 1.90% close. The two-year is lagging, trading near 1.254% from a 1.242% low yield. 1.27%overnight high and 1.276% Monday.

The curve trade was mixed with yield spread between the two- and 10-years tightened further into levels last seen ahead of the U.S. elections, trading 1.07 from 1.08, while the yield differential between the five- and 30-years steepened to near 1.10 from 1.08 plus.

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