Por Ross Kerber
Nov 8 (Reuters) – Traders were pushing up most U.S. Treasury yields on Monday, after Congress passed a $ 1 trillion infrastructure bill and ahead of US debt auctions. this week.
* The return of the 10-year benchmark papers improved 2.1 basis points, to 1.474%, in morning operations.
* Ian Lyngen of BMO Capital Markets said the deals reflect factors such as the passage of a long-awaited $ 1 trillion infrastructure bill in Washington over the weekend.
* Investors were also positioning themselves for the new US debt that will hit the market, he said. The Treasury is scheduled to auction $ 56 billion in 3-year notes on Monday, followed by 10- and 30-year notes on Tuesday and Wednesday.
* Trading followed the volatile session on Friday, amid uncertainty about how a strong jobs report in October will influence future Federal Reserve interest rate hikes.
* Despite the positive news on jobs and infrastructure, Lyngen said it is still noteworthy that the 10-year note yield is below 1.5%, after hitting 1.705% in October. That reflected the Fed’s shift to a tighter stance and the consequent moderation in growth and inflation expectations, he noted.
* “All the bearish bond scenarios that the market had contemplated have materialized,” he said.
* The president of the Federal Reserve Bank of St. Louis, James Bullard, said on Monday that he expects the entity to raise interest rates twice in 2022, after completing its gradual reduction of bond purchases in the middle of the year, although he indicated that, if necessary, the Fed could end the cut in the first quarter.
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