The 10-year Treasury yield is down by 4.8 bps to 4.062% on Wednesday following a $42 billion auction for the notes. For context, a note’s price has an inverse relationship with its yield.
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The auction tailed by 0.6 bps, with a high yield of 4.074% and a when-issued (WI) yield of 4.068%. A tail occurs when the high yield comes in above the WI yield and signals weak demand.
10-Year Yield Dips on Government Reopening Progress
The House is expected to approve a government reopening bill this evening that would extend funding until January 30. In addition, President Trump has already signaled that he would approve the bill. That would end the shutdown and open the floodgates for federal agencies to release key labor and inflation data.
However, White House Press Secretary Karoline Leavitt warned that October’s Consumer Price Index (CPI) and jobs report may not be released post-shutdown, casting uncertainty on the state of the economy. That could result in increased demand for safe-haven assets, like Treasuries, as the labor market had already begun to show signs of weakness before the shutdown began.
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