Treasury yields bounce off lows as stocks mount late-session comeback

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Treasury yields rose Friday, as the stock-market shrugged off worries about deteriorating economic data and U.S.-China tensions, but yields still ended the week lower.

hat are Treasurys doing?

The 10-year Treasury note yield
TMUBMUSD10Y,
0.645%

rose 2.3 basis points to 0.640%, trimming its weekly drop to 3.9 basis points. The 2-year note yield
TMUBMUSD02Y,
0.161%

was virtually flat at 0.149%, and showed little change for the week. The 30-year bond yield
TMUBMUSD30Y,
1.321%

rose 2.6 basis points to 1.320%, but fell 6.4 basis points this week.

What’s driving Treasurys?

Reports that the U.S. was moving to bar shipments of semiconductors to Huawei Technologies Co., the Chinese telecoms giant, initially buoyed trading in haven assets like government paper. Global Times editor Hu Xijin, who is perceived to have close ties to the Chinese government, said China may retaliate if the U.S. prevents microchip shipments to Huawei.

The renewed concerns about U.S.-China tensions rattled equities at the start of Friday, but the S&P 500
SPX,
+0.39%

and Dow Jones Industrial Average
DJIA,
+0.25%

erased their losses to end higher in a volatile session, partly driven by the expiration of stock options.

Investors also saw signs that the engine of the U.S. economy — consumer spending — had come to a halt. Retail sales fell 16.4% in April, marking its biggest slump on record, as coronavirus-related lockdowns shuttered swathes of the economy. Economists polled by MarketWatch had, on average, expected a 12.5% plunge.

Meanwhile, the Empire State business conditions index showed factory activity in New York State slumped to a reading of negative 48.5 this month, the second lowest level on record.

What did market participants’ say?

“Rates fell slightly on the week as worries about the depths of second quarter spending overcame supply concerns,” said Jim Vogel, an interest-rate strategist at FHN Financial.



Source : MTV