BND - U.S. Treasury yields march higher as the 2Y tops 5%

2023-08-15 10:10:52 ET

U.S. Treasury yields continued their march higher on Tuesday morning as the shorter end U.S. 2-Year Treasury yield ( US2Y ) touched 5.00% and the longer end U.S. 10-Year Treasury yield ( US10Y ) tagged highs that have not been seen since October of 2022.

Since touching 5.00%, the US2Y has receded as it now has given back 4 basis point and trades at 4.91%. At the same time the 10Y also has cooled from its earlier 4.27% high as its now down 2 basis points to 4.17%.

Moreover, see below the price action of other Treasury yields .

• The U.S. 5-Year Treasury yield ( US5Y ) is flat at 4.35%.
• The U.S. 7-Year Treasury yield ( US7Y ) gained 1 basis point to 4.29%.
• The U.S. 20-Year Treasury yield ( US20Y ) gained 2 basis points to 4.47%.
• The U.S. 30-Year Treasury yield ( US30Y ) gained 2 basis points to 4.30%.

Kathy Jones, Chief Fixed Income Strategist at Schwab Center for Financial Research said: "The stronger than expected retail sales report sent the 10-year Treasury to the highest level since 2007."

Moreover, Roth MKM noted: “Much of the movement last week took place in longer duration bonds, which helped to steepen the yield curve to its highest level since late April. The front end of the curve continues to be more anchored toward Fed action, while longer term maturities bonds will be affected by the stickier-than-anticipated inflation data. We recommend curve steepening trades at this point in the cycle.”

See below a chart provided by Roth MKM:

As the yields rise, Treasury-based exchange traded funds and large-scale bond funds come into focus as the two instruments trade in opposite directions. As yields climb, Treasury ETFs falter. See below a list of popular large-scale bond and Treasury funds for investors to analyze:

• iShares Core U.S. Aggregate Bond ETF ( AGG )
• Vanguard Total Bond Market Index Fund ETF Shares ( BND )
• Direxion Daily 20+ Year Treasury Bull 3X Shares ( TMF )
• iShares 20+ Year Treasury Bond ETF ( TLT )
• SPDR Portfolio Long Term Treasury ETF ( SPTL )
• Vanguard Long-Term Treasury ETF ( VGLT )
• iShares 10-20 Year Treasury Bond ETF ( TLH )
• iShares 7-10 Year Treasury Bond ETF ( IEF )
• iShares U.S. Treasury Bond ETF ( GOVT )
• Vanguard Intermediate-Term Treasury ETF ( VGIT )
• Schwab Intermediate-Term U.S. Treasury ETF ( SCHR )
• iShares 3-7 Year Treasury Bond ETF ( IEI )
• iShares 1-3 Year Treasury Bond ETF ( SHY )
• Schwab Short-Term U.S. Treasury ETF ( SCHO )
• iShares Short Treasury Bond ETF ( SHV )

More on the Bond Market:

• BlackRock highlights opportunities in short- to intermediate-term Treasuries
• Invesco highlights opportunities in the bond market
• Barclays believes the bond market selloff might not be over yet

For further details see: