Treasury ETF Damage Centered in 5-Year Note

Treasury exchange traded funds have been kicked lower this week as bond yields rise, but 5-year note yields have surged the most after what was seen as a weak auction.

The iShares Barclays 3-7 Year Treasury Bond (NYSEArca: IEI) is on a losing streak and has fallen harder than ETFs tracking bonds with longer durations. [Treasury ETFs Down]

The ETF’s next key support line appears to be at the 50-day moving average.

Yields on 5-year notes were trading around 1.69% on Wednesday afternoon, up from 1.39% at the end of last week. Bond prices and yields move in opposite directions.

Treasuries declined Wednesday after Greek lawmakers voted in favor of austerity measures, unwinding some of the safe-haven trade.

The dramatic rally in 5-year note yields means short-term rates could be heading higher.

iShares Barclays 3-7 Year Treasury Bond

5-Year Note Yields

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

Categories: Fixed-Income
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