The sudden spike in the 10-year U.S. Treasury yield eased on Thursday morning, with it rising slightly to hover above 1.83%.
The yield on the benchmark 10-year Treasury note added 1 basis point, climbing to 1.8379% at 4 a.m. ET. The yield on the 30-year Treasury bond moved 1 basis point higher to 2.1522%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
The 10-year rate hit 1.9% in early trading on Wednesday, amid mounting anticipation that the Federal Reserve would soon raise interest rates.
Concerns around the timing of central banks tightening monetary policy, and rising inflation, has seen bonds yields jump this week. The two-year U.S. Treasury yield, which reflects short-term interest rate expectations, also topped 1% for the first time in two years on Tuesday. It traded at 1.0474% early on Thursday morning.
Meanwhile, the 10-year German bund yield traded in positive territory for the first time in nearly three years on Wednesday morning but had fallen back to -0.018% in early trading on Thursday.
Willem Sels, global chief investment officer, private banking and wealth management at HSBC, told CNBC’s “Squawk Box Europe” on Thursday that he expected the market to “flip-flop” around the interest rate outlook, particularly in terms of the rotation between so-called growth and value stocks.
Sels said that HSBC had forecast that the 10-year Treasury yield would range between 1.5% and 2% over the next two years.
He said that this was partly because “central banks are actually managing to keep those longer term inflation expectations in check.”
Investors will be looking to the latest weekly jobless claims data, due out at 8:30 a.m. ET on Thursday, for further indication as to the state of the U.S. economic pandemic recovery.
U.S. existing home sales data for December is then expected to be released at 10 a.m. ET.
Auctions are scheduled to be held on Thursday for $50 billion of four-week bills, $40 billion of eight-week bills and $16 billion of 10-year Treasury Inflation-Protected Securities.
