US Treasury yields rise, coming off a five-week low

Yields on U.S. government debt rose on Monday after 10-year Treasury yields hit a five-week low on Friday.

Dallas Federal Reserve President Robert Kaplan, a voting member of the central bank’s policymaking committee, reiterated his view that a rate hike should come sooner rather than later.

Peter Boockvar, chief market analyst at The Lindsey Group said, “I have to put the drop in long-term yields as more in response to a flattening of the curve to what is now a growing belief that a March hike very well might happen.”

The Fed is scheduled to hold its next monetary policy meeting March 14, with the possibility of a rate hike high enough to keep investors intrigued. Market expectations for a rate hike in March are around 50 percent, according to Fed funds futures.

DNY59 | E+ | Getty Images

The yield on the benchmark 10-year Treasury notes rose to 2.365 percent from Friday’s close of 2.317, while the yield on the 30-year Treasury bond was marginally higher at 2.983 from 2.953 on Friday.

Last week, the 10-year Treasury yield fell 11 basis points, the steepest weekly decline since July 2016, according to Reuters.

US 3-MO 0.523
0.013 0%
US 1-YR 0.777
-0.005 0%
US 2-YR 1.20
-0.004 0%
US 5-YR 1.87
0.002 0%
US 10-YR 2.369
0.002 0%
US 30-YR 2.985

In economic news, durable goods orders rose 1.8 percent in January, slightly above the expected 1.7 percent increase. Pending home sales, meanwhile, dropped 2.8 percent in January to their lowest level in a year.

In oil markets, Brent crude was up 0.20 percent at $56.10 a barrel on Monday, while WTI crude was up 0.37 percent cents to $54.19 a barrel.