Treasury ETF Damage Centered in 5-Year Note

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Treasury exchange traded funds have been kicked lower this week as bond yields rise, but 5-year note yields have surged the most after what was seen as a weak auction.

The iShares Barclays 3-7 Year Treasury Bond (NYSEArca: IEI) is on a losing streak and has fallen harder than ETFs tracking bonds with longer durations.

The ETF’s next key support line appears to be at the 50-day moving average.

Yields on 5-year notes were trading around 1.69% on Wednesday afternoon, up from 1.39% at the end of last week. Bond prices and yields move in opposite directions.

Treasuries declined Wednesday after Greek lawmakers voted in favor of austerity measures, unwinding some of the safe-haven trade.

The dramatic rally in 5-year note yields means short-term rates could be heading higher.

iShares Barclays 3-7 Year Treasury Bond

(Click charts to expand)

5-Year Note Yields