In November of last year, a citizen wearing a mask is passing by in front of the New York Stock Exchange in Manhattan, New York, USA. AP Yonhap News
The bidding for US Treasury bonds, which attracted great attention from global investors, was successfully carried out on the 9th (local time). If the bidding result was sluggish, it was expected that the yield of government bonds would jump again and put a burden on the stock price.
US Treasury bonds stabilized downward, and major stock markets such as Nasdaq rebounded.
A total of $120 billion worth of U.S. Treasury bonds are scheduled for this week, and the first three-year Treasury bond worth $58 billion was held on this day. As a result of competitive bidding, the issuance rate was relatively low at an average annual rate of 0.355%.
The bid rate was 2.69 times, which was higher than last month (2.39 times) as well as the past average (2.40 times). This means that institutional investors competitively bid for government bonds. When the competition rate rises, the price goes up, and the rate of return goes down. It is an analysis that the number of institutions trying to invest in U.S. government bonds has increased again as the level of government bond interest rates has risen sharply recently.
The US Auction Economics said, “The demand for 3-year Treasury bonds revived, which instilled a sense of relief in the entire market.”
There are observations that future bids for government bonds with other maturities will proceed relatively smoothly. On the 10th, a 10-year maturity of $38 billion is issued and on the 11th, a 30-year maturity of $24 billion is each bid. All are held at 1pm EST.
On that day, the long-term Treasury bond yields stabilized in the US bond market. The 10-year yield was 1.55% per year, down 0.04 percentage points from the previous day.
5-year maturity is 0.83% per year (-0.03% points compared to the previous day), 7-year maturity is 1.23% (-0.05% points) per year, 20-year maturity is 2.16% per year (-0.04% points), 30-year maturity is 2.26 per year Each closed in% (-0.05% points).
The yield of US 10-year Treasury bonds, which had recently surged, reversed the decline on the 9th (local time). Trading Economics Offer
However, short-term interest rates for one month to one year remained unchanged or rebounded slightly compared to the previous day. In particular, the 6-month and 1-year yields rose by 0.01 percentage points, respectively. The 1-year Treasury Bond yield ended at 0.10% per year.
On the 25th of last month, as a result of bidding for 7-year government bonds ($62 billion), weak demand was confirmed, and interest rates soared. On the same day, when institutions were reluctant to buy government bonds, prices fell and yields surged. For this reason, Gennady Goldberg, a strategist at TD Securities, said in an investment report published this week ahead of the bidding, “In 2013, after Ben Bernanke, then Chairman of the Fed, announced his intention to reduce the size of asset purchases, government bond yields jumped and stock prices plummeted. ‘Taper tantrum’ could be re-enacted,” he warned. But in the end, it seemed to have stopped.
The New York Stock Market shot a fire after a long time due to the fall in US Treasury yields. The Nasdaq Index, which is centered on technology stocks, surged 3.69% over the course of one day to close at 13,073.83. It rebounded after a day of entering the correctional market, which means a decline of more than 10% from the peak. It is also the largest increase in a day in four months since last November.
Apple (4.1%), Facebook (4.1%), and Amazon (3.8%) recorded high growth rates of around 4%, and Tesla’s share price soared 19.6%.
However, it is unclear whether this market will continue. Matt Marley, chief market strategist of asset management firm Miller Tabak, told CNBC, “It is not yet clear whether the rise in technology stocks will be the starting point for a new leap forward or a temporary rebound.”
New York = Correspondent Jae-Gil Cho [email protected]