US 10-year Treasury yield headed for worst week in a year

By Ross Kerber and Tom Westbrook

BOSTON / SINGAPORE, Jun 11 (.) – Yields on benchmark 10-year U.S. Treasuries were heading to their biggest weekly decline in a year on Friday as the market’s belief was taking hold that the acceleration of inflation will be transitory, driving bears away from short positions.

* The return of 10-year notes, which falls when prices rise, fell close to one basis point, at 1.4502%, after falling to 1.428% earlier in the session, its lowest since the beginning of March. At that point, the yield had lost about 13 basis points for the week, its steepest decline since last June.

* Traders said short hedges are driving bonds higher – in a market that continues to receive enormous support from the Federal Reserve – after Thursday’s US inflation data was ignored as not scary enough to elicit prompt relief from the stimulus.

* Short positions in bonds had peaked since 2018, according to data from JP Morgan last week.

* His reversal flattened the yield curve and pushed the gap between the two- and 10-year notes to as low as 128 basis points in early trading on Friday, the narrowest in three months.

* In its last quotes it was trading at 131 basis points, two above the close of the day before.

* The spread between the five-year and 30-year notes was trading at 142 basis points, less than one point above Thursday.

* At the long end of the curve, the 30-year yield was 2.1455% after falling to 2.122%, its lowest since late February.

(Edited in Spanish by Carlos Serrano)

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