US 10 Year Bond Yield Drops Below 1.79%

The yield on the U.S. 30-year Treasury bond fell to record low and the U.S. 10-year Treasury yield fell below October lows to hit a full-year low early Wednesday as a surprise drop in a measure of retail sales in December sparked fresh bets the Federal Reserve might not raise interest rates in 2015.

“It’s all about retail sales,” said Art Hogan, chief market strategist at Wunderlich Securities. “The question is, the consumer is saving at the pump but is he spending?”

The Commerce Department said on Wednesday retail sales excluding automobiles, gasoline, building materials and food services fell 0.4 percent last month after a 0.6 percent rise in November. Economists had expected core retail sales to rise 0.4 percent.

In midmorning trading, the yield on the 10-year bond was trading at 1.821 percent, after briefly touching 1.784 percent—its lowest level since May 2013.

The yield on the government’s 30-year bond fell to a record low of 2.395 percent, surpassing the previous record low of 2.443 percent set in July 2012, according to Tradeweb data. Recently, it traded at 2.432 percent.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza