U.S. Treasury prices pared early losses, spinning higher in light activity Wednesday after profits were booked early and some curve-trade positioning unwound pressured prices. The session’s disappointing data is expected to have limited impact with the big, marquee employment report sitting at the end of the week. Traders cite month-end buying keeping prices supported as well as ongoing concerns over slow inflation growth. Official concerns over slow building inflation has added to the upside.
The 30-year yield recently traded a new low near 2.87% from a 2.9005% high and 2.885% close Tuesday. The 10-year yield was on the low at 2.202% from a 2.2342% high and 2.215% close. The five-year yield has ticked to 1.7485% from a 1.7812% high and 1.76% Tuesday. The two-year yield has boosted back to near 1.286% from a 1.2659% low and 1.285% close.
The curve trade has resumed its push along a flatter slope after early unwinding to a steeper slant. The yield spread between the two- and 10-years has been digging deeper into the tightest levels since October, trading near 92.5 from 93. Futures traders reported stepped-up activity between the five- and 30-years, which has narrowed to just inside 112 from 112.5.