Bonds Rise Ahead of $42 Billion Treasury Sale – US Market Wrap

The world’s largest bond market has rebounded, with traders preparing for a record $42 billion sale of 10-year Treasuries following a strong start to this week’s increased issuance sizes.

Bonds rose after a selloff that drove two-year yields to their highest level since before the Fed’s December “pivot”. A $54 billion sale of three-year notes boosted sentiment and forced traders to ignore a slew of cautious remarks from Federal Reserve speakers. The S&P 500 edged higher. Megacaps were mixed, with Tesla rising and Nvidia declining. Chinese stocks listed in the United States rose on expectations that the country will do more to support markets. New York Community Bancorp fell 22%.

As expected, a chorus of central bank officials echoed Jerome Powell’s signals that the central bank will not rush to ease policy. Mester, President of the Federal Reserve Bank of Cleveland, said policymakers will likely gain confidence to cut interest rates “later this year” if the economy evolves as expected. Her Minneapolis counterpart, Kashkari, praised the significant improvement in inflation but said more progress is needed.