Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexEconomic EventsPress releases

BOND REPORT: Treasurys See Buying On Reports Corporate Tax Cut Delayed Until 2019

share with twitter share with LinkedIn share with facebook
share via e-mail
11/09/2017 | 11:38pm CET

By Mark DeCambre, MarketWatch , Sunny Oh

U.S. Treasury yields edged slightly lower from their intraday peaks on Thursday after reports that corporate tax cuts would be delayed.

What are yields doing?

The 10-year Treasury note yield inched up 0.7 basis point to 2.333% after hitting an intraday high of 2.344%. The 2-year note yield fell 1.2 basis points to 1.633%, its highest yield since October 2008. The 30-year bond yield rose 2.3 basis points to 2.808%.

Bond prices and yields move in the opposite direction.

What's driving Treasurys?

Senate Republicans unveiled a tax plan that would delay a cut in corporate rates to 2019 in a bid to shrink the estimated budget deficit. That sparked a so-called flight to quality, where investors rotate away from stocks into Treasurys and assets perceived as relatively safe.

The bond buying subsided, however, after the House Ways and Means Committee approved a bill to revise the U.S. tax code, setting the stage for a vote by the full House as soon as next week.

According to an estimate by the Congressional Budget Office, the tax bill written by House Republicans would boost the U.S. deficit by $300 billion more than lawmakers estimated. Over a decade, it would increase the deficit by $1.7 billion, beyond the $1.5 trillion required to meet Senate rules under the recently passed budget, the CBO said.

Treasury traders are worried that tax cuts could increase the deficit and result in a boost to new issuance, which would be bearish for bond prices, pushing yields higher.

What did market participants say?

"It's a reaction to the equity market. We're at a situation where the valuations are so steep, where even equity investors want to invest in safe-haven assets like Treasurys. So, we can see a flight to quality," said Subadra Rajappa, head of U.S. rates strategy by Société Générale.

What data are ahead?

What are other assets doing?

Stocks showed the strongest reaction to the tax cut reports, with the Dow Jones Industrial tumbling more than 100 points. The Nasdaq Composite, the S&P 500 and the Dow all fell on Thursday.

European bonds sold off after the European Central Bank raised its growth forecast for the eurozone from 1.7 percent to 2.2 percent . The German 10-year yield rose 5 basis points to 0.377%, while the Italian 10-year yield rose 7 basis points to 1.810%.

share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news "Economy & Forex"
07:29a PEW CHARITABLE TRUSTS : Trump's Environmental Actions Spark Resistance in Many States
07:16a NEWS HIGHLIGHTS : Top Global Markets News of the Day
07:16a NEWS HIGHLIGHTS : Top Company News of the Day
06:44a AER AUSTRALIAN ENERGY REGULATOR : Wholesale electricity price spikes in Victoria and South Australia trigger regulator report
06:34a MINISTRY OF FINANCE OF STATE OF JAPAN : Balance of the Fiscal Loan Fund (End of December 2017)
06:16a NEWS HIGHLIGHTS : Top Financial Services News of the Day
05:59a PETRONAS PETROLIAM NASIONAL BERHAD : ' lng delivery not impacted by gas leak incident at ssgp
05:55a Stocks, dollar sag after U.S. government shutdown
05:36a Senate Fails to End Government Shutdown, Plans Procedural Vote -- Update
05:16a NEWS HIGHLIGHTS : Top Company News of the Day
Latest news "Economy & Forex"