Treasuries fell, with investors driving the benchmark yield higher ahead of a deluge of bond auctions this week. The dollar rose while U.S. stocks fell for the first time in seven days.
The Treasury will start a week of auctions totaling $258 billion Tuesday with $151 billion of short-term bills and $28 billion of two-year notes. The 10-year rate rose to 2.9 percent. The S&P 500 Index fell amid earnings from Home Depot Inc. and Walmart Inc. The greenback gained versus major peers.
While speculators are turning bearish, money managers are looking at the highest U.S. yields in years as a buying opportunity in a world where shorter-term Japanese and German notes still carry negative yields. Investors will also get to parse minutes this week from the most recent meetings of both the Federal Reserve and the European Central Bank.
The U.S. stock market only had a taste of the potential damage from higher bond yields, with the biggest test yet to come, according to Morgan Stanley. “Appetizer, not the main course,” is how the bank’s strategists described the correction of late January to early February.
Source: Bloomberg Pro Terminal
Jr Trader Alexander Kumanov
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