Yields on U.S. government debt moved in opposite directions Oct. 21 as investors weighed artificial intelligence (AI) financing costs, while Reuters reported a $13 billion 20-year bond auction during the session.
Reuters put the 10-year Treasury note yield at 5.111% in afternoon trading, down 0.6 basis point after a session low of 5.081%. The 30-year yield was 5.412%, down 1.3 basis points, while the two-year yield rose 0.2 basis point to 4.789%.
The readings extend EconoTimes' earlier coverage of Asian markets and U.S. Treasury yields.
Reuters reported that bids for the 20-year bonds totaled 2.73 times the amount offered, and the high yield was 5.469%. The news agency described demand as above average but the overall auction result as mixed. The U.S. Department of the Treasury's quarterly refunding plan listed the sale at $13 billion, and its schedule set the reopening for Oct. 21.
The Nasdaq Composite gained 1.1%, while CoreWeave shares fell 0.5%, the Associated Press reported. The AP linked financing concerns to CoreWeave's business model: the company borrows to obtain AI chips and rents the equipment to customers. The outlet also reported that higher borrowing costs had raised concerns about the pace of data-center construction.
Bill Northey, senior investment director at U.S. Bank Wealth Management, said yields around 5.1% gave investors an alternative to equities. “There has been a very clear trade-off across capital markets,” he told Reuters.
The previous week, the 10-year yield fell 14.6 basis points, its largest weekly decline in eight months, Reuters reported. The agency said Treasury demand for safety coincided with losses in AI-related stocks.
Futures pricing implied a 14.9% chance of a 25-basis-point rate increase at the Fed's Oct. 28 announcement, down from 33.2% a week earlier and 57.6% a month earlier, Reuters reported. The figures reflect market pricing, not a Federal Reserve forecast.
Treasury's daily par-yield series showed a 10-year rate of 5.13% on Oct. 21, compared with 5.12% the previous day. The series uses indicative bid-side quotes taken near 3:30 p.m. ET and measures a par yield, which differs from the yield on the specific note Reuters cited.
The Treasury has scheduled a $26 billion five-year Treasury Inflation-Protected Securities auction for Oct. 22, ahead of the Fed's Oct. 27-28 meeting.
