Rates Week: 10-Year Yield Falls 15 Basis Points to 5.09%
The 10-year Treasury yield fell from 5.24% on Oct. 9 to 5.09% on Oct. 16, per FRED; the 2-year ended at 4.74% and the VIX at 19.99.
Treasury yields declined during the week of Oct. 12, according to FRED data. The 10-year yield fell 15 basis points, from 5.24% on Friday, Oct. 9, to 5.09% on Oct. 16; FRED has no Oct. 12 reading. The 2-year yield stood at 4.74% at the end of the week, leaving the 10-year/2-year spread at 35 basis points.
The VIX closed at 19.99 on Oct. 16, and the high-yield option-adjusted spread was 3.31% on the same date. The effective federal funds rate was 3.88% as of Oct. 17, and the broad trade-weighted dollar index was 121.40 as of Oct. 16.
Fox Business reported that Warsh keeps Wall Street guessing on the October rate move. A Seeking Alpha commentary was headlined "S&P500: Yields And Stocks Are Dropping Together, It Has A Dangerous Precedent." CNBC reported that Trump waived broad new Russia sanctions and tariffs under the Graham Act, citing national interest.
The coming week's U.S. calendar is weighted toward housing. September housing starts, due Oct. 20, are expected at 1.30 million against 1.288 million previously, and building permits at 1.39 million against 1.403 million. Pending home sales for September are forecast to fall 0.5% after a 0.3% gain. The NAHB Housing Market Index for October, due Oct. 19, is expected at 32, unchanged from the prior reading.
Initial jobless claims for the week ended Oct. 17 are expected at 200,000 when released Oct. 22. On Oct. 23, the S&P Global Composite PMI is forecast at 57.6 against 58.4 previously, and Michigan consumer sentiment at 46.3 against 48.1.
Data
| Measure | Level | As of |
|---|---|---|
| 10-Year Treasury | 5.09% | Oct. 16 |
| 2-Year Treasury | 4.74% | Oct. 16 |
| 10Y-2Y spread | 35 bp | Oct. 16 |
| Effective fed funds | 3.88% | Oct. 17 |
| VIX | 19.99 | Oct. 16 |
| High-yield OAS | 3.31% | Oct. 16 |
| Broad dollar index | 121.40 | Oct. 16 |
Data: FMP, FRED. Figures are close to close unless stated otherwise.
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Neutral market summary, for information only. Not investment advice or a recommendation to buy or sell any security.
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