The U.S. 10-Year Treasury yield dropped to its 100-day moving average for first time in 4-months on Friday which has provided support for exchange traded funds that are linked to U.S. Treasury yields.
Five funds in particular that have made topside moves are the iShares Core U.S. Aggregate Bond ETF (NYSEARCA:AGG), Vanguard Total Bond Market ETF (NASDAQ:BND), iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT), iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI), and the iShares 7-10 Year Treasury Bond ETF (IEF).
Daily price action: AGG +0.9%, BND +0.7%, TLT +1.5%, IEI +0.5%, and IEF +0.9%.
In the bond market, yields and prices move in opposite direction from each other. Therefore, as there is a decrease in yields it will in turn cause related bond ETFs to rise.
The U.S. 10 Year Treasury yield now sits at 2.79% and is lower by 11 basis points. Moreover, at one point the 10-Year dipped as low as 2.73%. Looking at the U.S. 2 Year Treasury yield and investors will note that it has declined 10 basis points to 2.99%.
Additionally, yields have come down significantly since they peaked last month back on June 14, which has added more support for the above bond funds.
Since June 14 the U.S. 10 Year Treasury yield is down 70 basis points while the U.S. 2-Year Treasury yield has fallen 47 basis points. As a direct result since June 14 AGG is +3.7%, BND is +3.6%, TLT +7.4%, IEI +3%, IEF +5.1%.
In broader market news, major averages trade lower on the trading session.