Treasuries Continue To Fall As Demand Sags

U.S. Treasuries fell for a fifth straight session as demand for long-term government debt waned globally amid a flurry of bond auctions this week, Michael Mackenzie and Greg Ritchie reported for Bloomberg News.

Yields have been climbing as investors reduce bets on Federal Reserve interest-rate cuts by year-end.

Yields rose across the curve, pushing the 30-year yield toward 5%, its highest level since mid-June. The benchmark 10-year notes pared some losses at one point in New York, with the yield rising about two basis points.

Meanwhile, a three-year note auction attracted soft demand, marking the start of a combined $119 billion slate of Treasury coupon offerings this week. Sales of 10- and 30-year debt are scheduled over the next two days.

Yields have been climbing as investors reduce bets on Federal Reserve interest-rate cuts by year-end, following a report last week showing a surprisingly resilient U.S. labor market.

Rate swaps show traders leaning toward a cut in September, followed by another quarter-point reduction by year-end.

“The local bears are in control, and I don’t see a reason they won’t lean into this more,” said Gregory Faranello, head of U.S. rates trading and strategy at AmeriVet Securities. “The global long-end is weak.”

In another sign of those pressures, the 30-year bond’s yield ended above the 20-year’s for the first time in nearly four years on Monday, Carter Johnson also reported for Bloomberg News.