U.S. Treasury yields ticked lower in early Thursday trade ahead of the weekly jobless claims data release that may furnish clues on whether employment is continuing to recover from the coronavirus pandemic.
What are Treasurys doing?
The 10-year note yield fell 1.9 basis points to 0.656%, while the 2-year note rate edged 0.6 basis point down to 0.135%. The 30-year bond yield slipped 2.8 basis points to 1.387%. Yields move in the opposite direction of bond prices.
What’s driving Treasurys?
The number of Americans filing for jobless claims in the latest weekly period is expected to fall to 910,000, down from 963,000. Though that would represent an improvement from the weeks when claims stood above a million, they remain elevated even compared to the depths of the 2007-09’ Great Recession.
See: Google searches on how to ‘file for unemployment’ points to further decline
The Philadelphia Federal Reserve will release its August reading of its gauge of regional manufacturing activity at 8:30 a.m. ET, followed by The Conference Board’s leading economic indicators for last month at 10 a.m.
The bond market saw losses on Wednesday after the Fed suggested in the minutes of its July minutes that it would not keep Treasury yields in check through so-called yield curve control polices.
Those losses were swiftly clawed back overnight as the same worries which triggered the previous session’s selloff also helped to weigh on risk assets and spark a rally in haven investments.
Futures for the S&P 500
SPX,
showed U.S. equities were poised to extend Wednesday’s retreat, after stock-market benchmarks established new records earlier this week.
See: Fed staff lowers forecast for economic growth over the rest of year: FOMC minutes
The FOMC minutes also showed the Fed’s staff economists were cautious over the economic outlook over the second half of the year, dampening hopes that the U.S. would experience a rapid recovery following the deep contraction during the second quarter.
What did market participants’ say?
“While the post FOMC minutes sell-off was overdone, it did correctly capture how sensitive aggressive trading accounts are to the near-term direction of Fed policy,” said Jim Vogel, an interest-rate strategist at FHN Financial.
Source : MTV
