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Reuters

Reuters

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Business & Economics

US bond investors weigh 'convexity' risk in recent Treasury yield decline

Reuters
Summary
Nutrition label

81% Informative

Mortgage portfolio managers and insurance companies are buying interest rate swaps to offset the effects of mortgage refinancing to take advantage of lower interest rates.

The benchmark U.S. 10-year yield, which influences the cost of borrowings on homes, cars, and businesses, has not moved much since bottoming around 4.10% on March 4 , after a 56 -basis point decline since February 6 .

But "expectations of underlying convexity needs may...have caused implied vols to become elevated in longer tenors," he said. (Reporting by Gertrude Chavez-Dreyfuss ; Editing by Alden Bentley and Andrea Ricci ).

VR Score

92

Informative language

98

Neutral language

78

Article tone

formal

Language

English

Language complexity

54

Offensive language

not offensive

Hate speech

not hateful

Attention-grabbing headline

not detected

Known propaganda techniques

not detected

Time-value

short-lived

External references

no external sources

Source diversity

no sources

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