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TREASURIES-Bonds steady before vote on U.S. healthcare law
March 23, 2017 / 1:44 PM / 4 months ago

TREASURIES-Bonds steady before vote on U.S. healthcare law

3 Min Read

    * House healthcare vote in focus
    * Fed's Yellen doesn't address monetary policy
    * Treasury to sell $11 bln, 10-year TIPS

    By Karen Brettell
    NEW YORK, March 23 (Reuters) - U.S. Treasuries were steady
on Thursday as investors waited for a vote by lawmakers on a
healthcare proposal, which is seen as a gauge of the Trump
administration’s ability to implement near-term goals.
    U.S. President Donald Trump faces a vote in the House of
Representatives on a plan that would roll back the signature
healthcare law of former President Barack Obama.             
    Delays in passing domestic legislation, including
healthcare, are seen as likely to push back any new fiscal
stimulus, which investors had anticipated would boost growth and
possibly lead to faster than previously expected interest rate
increases.
    Concerns about delays in fiscal reform helped send stocks
lower this week while increasing demand for safe-haven bonds.
    “There is a growing consensus of people who perhaps think
that the healthcare bill might not pass, and maybe the market
got a little ahead of itself with the expectations of what Trump
could get accomplished right away,” said Dan Mulholland, head of
Treasuries trading at Credit Agricole in New York.
    Benchmark 10-year notes             were last up 1/32 in
price to yield 2.40 percent.
    The 10-year yields fell to 2.375 percent on Wednesday, their
lowest since Feb. 28. They are down from a three-month high of
2.63 percent on March 14.
    Investors have lowered expectations of a more aggressive
Federal Reserve as doubts about the pace of change in Washington
increase.
    The U.S. central bank raised interest rates last week as
expected but took a more dovish tone on future hikes than some
investors had anticipated.
    Investors who held back from taking new positions before the
Fed meeting have also returned to the market since the rate
hike, helping bonds rally.
    “Money was sidelined waiting for the Fed to hike rates,”
said Mulholland. "Then once they did, we saw a bit of money come
into the market."
    Fed Chair Janet Yellen did not address monetary policy or
the economic outlook in prepared remarks for a childhood
education conference in Washington on Thursday.             
    The Treasury Department will sell $11 billion in 10-year
Treasury Inflation-Protected Securities on Thursday.
    Durable goods data and manufacturing data on Friday will be
a focus for investors.

  
 
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