U.S. Treasuries ended the week mixed with the long bond leading while the shorter end lagged as the curve trade dominated the quiet, low-volume session. Traders were preparing for a run of Treasury auctions in the week ahead as well as anticipated new corporate debt. Prices were pressured late as San Francisco Federal Reserve President John Williams called for gradual near-term rate hike hikes in a late local speech, airing concerns that waiting could result in sharper increases.
The 30-year settled off the week’s highs near 2.49% from a 2.50% close Thursday. The 10-year settled at 1.735% after hitting a 1.7313% midday high and 1.745% close. The five-year closed was near unchanged at 1.245% and the two-year closed near 0.8275% from 0.815%.
The curve trade was flattened with the yield spread differential between the two- and 10-years tighten to 91 from 93 Thursday while the five- and 30-year yield gap tightened to 1.24 from 1.25 plus.
Monday’s calendar has the September Chicago National Activity index at 8:30 a.m. ET and the preliminary October manufacturing Purchasing Managers Index at 9:45 a.m.
New York Fed President William Dudley is tentatively scheduled to speak at a Treasury market event at 9 a.m. with Governor Jerome Powell appearing at 2 p.m. St. Louis head James Bullard speaks at University business and economic event at 9:05 a.m. and Chicago’s Charles Evans is set to speak at a local luncheon at 1:30 p.m.
Treasury will offer details on Tuesday’s four-week bill auction at 11 a.m. and sell $42 billion three- and $36 billion six-month bills at 11:30 a.m.