US 10-year yield hits one-month low

The yield on the 10-year Treasury note hit a one-month low of 2.31% on Friday and trades around 2.33% in the Asian session today.

The yield has shed 20 basis points over the last twelve days as confidence dimmed in a March move by the Federal Reserve. The minutes released last week carried a cautious tone. More importantly, Fed’s Mester, while speaking to Bloomberg last week, said the Fed is unlikely to do anything that would surprise/shock markets.

That seems to have convinced markets that Fed once again overpromised in December to under deliver in 2017.

According CME Group 30-Day Fed Fund futures prices, the market sees a 23% probability of a rate hike in March. Odds of May and June rate hike stand at 49% and 68% respectively.

We could see the yields retake recent losses if the core durable goods number for January due later today print well above the estimate of 0.5%.