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Treasuries rise as traders cut rate-hike bets and position for future cuts

2026-08-14·newswire-us-stock-013001
Treasuries rise as traders cut rate-hike bets and position for future cuts.

U.S. Treasuries rallied after a softer-than-expected July producer price index reading. Falling oil prices added to the gains as traders assessed reports about shipping through the Strait of Hormuz. Long-dated Treasuries lagged, steepening the yield curve both before and after a new 30-year Treasury auction.

The auction's awarded yield was the highest for a comparable maturity since 2001. Short-end rates indicated that markets had reduced expectations for further Federal Reserve tightening, while options markets showed demand for hedges against rate cuts by the Fed and the Bank of England. Just after 3 p.m.

New York time, Treasury yields were 4 to 7 basis points lower. The 5s30s spread widened by about 2 basis points, approaching its intraday high and reaching its steepest level since May. The 10-year Treasury yield fell 6 basis points, near its intraday low, outperforming German and U.K. government bonds of the same maturity.

The curve remained steeper in the U.S. afternoon. The $25 billion 30-year Treasury auction stopped 0.4 basis point cheaper than its when-issued trading level. Primary dealers received 11.5% of the allocation, up from the previous auction.

Indirect bidders received 66.8%, down from the prior auction, while direct bidders received 21.6%, up from the prior auction. The bid-to-cover ratio was 2.39, compared with an average of 2.36 for the past six new-issue auctions. Earlier, the lower-than-expected July PPI reading and falling oil prices lifted Treasuries.

WTI crude futures settled 2.4% lower at the lowest level of the week. At the short end of the curve, traders continued to sell October federal funds futures, extending a theme that had run throughout the week. Flows included a block sale of 15,000 contracts, among other trades.

Short positions were betting that the Fed could raise rates at its September policy meeting. In SOFR and SONIA options, traders showed demand for bets on rate cuts by March expiration. As of 4:10 p.m. New York time, the 2-year Treasury yield was down 5.5 basis points at 4.1466%. The 5-year yield fell 6 basis points to 4.3216%.

The 10-year yield declined 4.6 basis points to 4.6467%. The 30-year yield fell 4 basis points to 5.2178%. The spread between 5-year and 30-year Treasury yields rose by about 2 basis points to 89.44 basis points. The 2s10s spread widened by about 0.9 basis point to 49.8 basis points.

#Stocks #Fed #Bonds #Oil

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Full text

Treasuries rise as traders cut rate-hike bets and position for future cuts

U.S. Treasuries rallied after a softer-than-expected July producer price index reading. Falling oil prices added to the gains as traders assessed reports about shipping through the Strait of Hormuz. Long-dated Treasuries lagged, steepening the yield curve both before and after a new 30-year Treasury auction. The auction's awarded yield was the highest for a comparable maturity since 2001. Short-end rates indicated that markets had reduced expectations for further Federal Reserve tightening, while options markets showed demand for hedges against rate cuts by the Fed and the Bank of England. Just after 3 p.m. New York time, Treasury yields were 4 to 7 basis points lower. The 5s30s spread widened by about 2 basis points, approaching its intraday high and reaching its steepest level since May. The 10-year Treasury yield fell 6 basis points, near its intraday low, outperforming German and U.K. government bonds of the same maturity. The curve remained steeper in the U.S. afternoon. The $25 billion 30-year Treasury auction stopped 0.4 basis point cheaper than its when-issued trading level. Primary dealers received 11.5% of the allocation, up from the previous auction. Indirect bidders received 66.8%, down from the prior auction, while direct bidders received 21.6%, up from the prior auction. The bid-to-cover ratio was 2.39, compared with an average of 2.36 for the past six new-issue auctions. Earlier, the lower-than-expected July PPI reading and falling oil prices lifted Treasuries. WTI crude futures settled 2.4% lower at the lowest level of the week. At the short end of the curve, traders continued to sell October federal funds futures, extending a theme that had run throughout the week. Flows included a block sale of 15,000 contracts, among other trades. Short positions were betting that the Fed could raise rates at its September policy meeting. In SOFR and SONIA options, traders showed demand for bets on rate cuts by March expiration. As of 4:10 p.m. New York time, the 2-year Treasury yield was down 5.5 basis points at 4.1466%. The 5-year yield fell 6 basis points to 4.3216%. The 10-year yield declined 4.6 basis points to 4.6467%. The 30-year yield fell 4 basis points to 5.2178%. The spread between 5-year and 30-year Treasury yields rose by about 2 basis points to 89.44 basis points. The 2s10s spread widened by about 0.9 basis point to 49.8 basis points.

U.S. Treasuries rallied after a softer-than-expected July producer price index reading. Falling oil prices added to the gains as traders assessed reports about shipping through the Strait of Hormuz.

Long-dated Treasuries lagged, steepening the yield curve both before and after a new 30-year Treasury auction. The auction's awarded yield was the highest for a comparable maturity since 2001. Short-end rates indicated that markets had reduced expectations for further Federal Reserve tightening, while options markets showed demand for hedges against rate cuts by the Fed and the Bank of England.

Just after 3 p.m. New York time, Treasury yields were 4 to 7 basis points lower. The 5s30s spread widened by about 2 basis points, approaching its intraday high and reaching its steepest level since May. The 10-year Treasury yield fell 6 basis points, near its intraday low, outperforming German and U.K. government bonds of the same maturity.

The curve remained steeper in the U.S. afternoon. The $25 billion 30-year Treasury auction stopped 0.4 basis point cheaper than its when-issued trading level. Primary dealers received 11.5% of the allocation, up from the previous auction. Indirect bidders received 66.8%, down from the prior auction, while direct bidders received 21.6%, up from the prior auction. The bid-to-cover ratio was 2.39, compared with an average of 2.36 for the past six new-issue auctions.

Earlier, the lower-than-expected July PPI reading and falling oil prices lifted Treasuries. WTI crude futures settled 2.4% lower at the lowest level of the week.

At the short end of the curve, traders continued to sell October federal funds futures, extending a theme that had run throughout the week. Flows included a block sale of 15,000 contracts, among other trades. Short positions were betting that the Fed could raise rates at its September policy meeting.

In SOFR and SONIA options, traders showed demand for bets on rate cuts by March expiration.

As of 4:10 p.m. New York time, the 2-year Treasury yield was down 5.5 basis points at 4.1466%. The 5-year yield fell 6 basis points to 4.3216%. The 10-year yield declined 4.6 basis points to 4.6467%. The 30-year yield fell 4 basis points to 5.2178%.

The spread between 5-year and 30-year Treasury yields rose by about 2 basis points to 89.44 basis points. The 2s10s spread widened by about 0.9 basis point to 49.8 basis points.

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