The week-long rally in Treasuries has halted this morning, with yields modestly higher across the curve. However, yields in the 2-year to 10-year part of the curve are down approximately 25 bps since March 19. There weren’t any major macro headlines overnight, although a Reuters article suggested more progress in U.S./China negotiations, which is contributing to the pause in the U.S. bond rally. The article states that China has made “unprecedented” proposals to curb the forced technology transfer for U.S. companies doing business in China, which is an issue at the forefront of U.S. concerns. The White House released a widely anticipated memo yesterday regarding GSE reform, which would ultimately focus on returning Fannie Mae and Freddie Mac to the private market. However, the memo fell short of providing specific details (described by some as a “plan for a plan”), which suggests any actual reforms are a long way away and largely in line with market expectations.
Jason Haley
Managing Director, Investment Management Group
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