Wednesday’s trading session saw yields climb after the Bureau of Labor Statistics said producer price inflation during the month of January was better than expected. Headline inflation climbed 0.5% month over month, marking the highest move since Oct. 2018.
The yield the benchmark 10-year Treasury note climbed two basis points to 1.5806%, while the yield on the 30-year Treasury bond, which recently fell below 2%, climbed back into the 2% range once again at 2.0325%.
In addition to inflation data, the number of January housing starts came in better than expected. U.S. homebuilding fell less than expected in January as the number of permits climbed to a near 13-year high, according to the Commerce Department.
The wild card for yields is still what the coronavirus does in the next few days.
“That Treasuries are only slightly weaker in response speaks to how data un-dependent trading has become as the broader question and focus remains on discerning the scale of the COVID-19 virus’s negative consequences,” Jon Hill, BMO’s rates analyst, said in a note on Wednesday.
For traders salivating at an opportunity to trade Treasury debt moves, they can look at these four leveraged:
- Direxion Daily 20+ Year Treasury Bull 3X Shares (NYSEArca: TMF): seeks daily investment results, before fees and expenses, of 300% of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index. The index is a market value weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than 20 years.
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- Direxion Daily 7-10 Year Treasury Bull 3X Shares (NYSEArca: TYD): seeks daily investment results, before fees and expenses, of 300% of the daily performance of the ICE U.S. Treasury 7-10 Year Bond Index. The index is a market value weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than seven years and less than or equal to ten years.
- Direxion Daily 7-10 Year Treasury Bear 3X Shares (NYSEArca: TYO): seeks daily investment results before fees and expenses of 300% of the inverse (or opposite) of the daily performance of the ICE U.S. Treasury 7-10 Year Bond Index. The index is a market value weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than seven years and less than or equal to ten years.
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