US Bond Market: Treasury Bonds Edge Higher as Investors Await Alphabet's Massive Debt Pricing

Short-term and medium-term U.S. Treasuries outperformed in early trading after White House National Economic Council Director Kevin Hassett suggested that the U.S. job market may soften in the coming months. During the session, U.S. Treasuries largely maintained their gains, although the earlier steepening momentum eased later in the day, as investors continued to await pricing for Alphabet's $20 billion bond issuance.

Shortly after 3 p.m. New York time, U.S. Treasury yields were near intraday lows, falling across the curve by as much as 1.5 basis points. After Alphabet announced its massive bond issuance, long-term U.S. Treasuries slightly lagged in early U.S. trading.

Hassett said that as U.S. population growth slows, employment numbers should decrease in the coming months. He added that this should not trigger panic, and subsequently, short-term Treasuries were boosted. The previously delayed January nonfarm payrolls report will be released on Wednesday.

The early rally was mainly driven by strong buying in 5-year Treasury futures, but the steepening momentum weakened later on.

The total amount of new U.S. dollar bond issuance reached $23.8 billion, with most coming from Alphabet's deal. Swap spreads remained generally stable, narrowing slightly across the curve compared to Friday's closing levels.

As of 3:41 p.m. New York time (UTC+8), the yield on the U.S. 2-year Treasury stood at 3.4851%;

The yield on the U.S. 5-year Treasury was 3.7429%;

The yield on the U.S. 10-year Treasury was 4.1981%;

The yield on the U.S. 30-year Treasury was 4.849%;

The spread between the 2-year and 10-year U.S. Treasury yields was 71.083 basis points;

The spread between the 5-year and 30-year U.S. Treasury yields was 110.437 basis points.

Editor: Ding Wenwu