Treasury yield curve flattens after US GDP data

FXStreet (Mumbai) – The treasury yield curve continues to flatten on Friday as the upbeat US GDP report led to rise in demand for longer dated securities and relatively stable short dated securities.

US 2-year note advances, indicating a rise in rate hike bets

At the short-end of the yield curve, the 2-year yield is up 1.2 basis points at 0.743%. The yield had hardened after the FOMC statement sounded upbeat and increased September rate hike bets.

The bets increased further on Thursday after the data showed growth in the United States accelerated in the second quarter to a 2.3% annual rate, backed by solid consumer demand. First-quarter growth was revised to a positive 0.6% rate from an initial read of negative 0.2%.

The yield curve flattened, which usually happens when the fed is nearing the rate hike. The 10-year yield currently trades moderately lower at 2.263%, while the 30-year yield is down 1.6 basis points at 2.937%. The long-end has been under pressure since the release of the FOMC statement on Wednesday.

The treasury yield curve continues to flatten on Friday as the upbeat US GDP report led to rise in demand for longer dated securities and relatively stable short dated securities.

(Market News Provided by FXstreet)