- US 10-year yield jumped to the highest since mid-April.
- Yields rose after Treasury announced the launch of the 20-year bond.
The yield on the US 10-year and 30-year government bond yields rose on Wednesday after Treasury said it will launch a long-planned 20-year bond and move away from its current focus on Treasury bills that have helped raise funds over the past six weeks.
“In light of the substantial increase in borrowing needs, Treasury plans to increase its long-term issuance as a prudent means of managing its maturity profile and limiting potential future issuance volatility,” Brian Smith, Treasury’s assistant secretary for federal finance, said in a statement, according to Reuters.
While the 10-year yield jumped to 0.743%, the highest since April 15, the 30-year yield clocked a high of 1.446%, the level last seen on March 26.
The Treasury expects to borrow $2.999 trillion during the April-June period. That amount is five times larger than the record quarterly borrowing registered during the 2008 financial crisis.
At press time, the 10-year and 30-year yields are seen at 0.681% and 1.373%, respectively. The yields may drop as growth-linked currencies like the Aussie dollar have come under pressure during Thursday’s Asian trading hours owing to escalating tensions between the US and China over the coronavirus outbreak and fears it would reignite the trade war.
Speaking at a White House event on Wednesday, the US President Donald Trump said that China ‘may or may not’ keep the trade deal and he will be able to report on whether china is fulfilling obligations on trade deal next week or week after.
It was reported earlier this week that the Trump administration is said to be “turbocharging” an initiative to remove global industrial supply chains from China.
The Trump administration has recently stepped up its attack on China with the President citing tariffs as the best option to punish the world’s second-largest economy for its handling of the virus outbreak.
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