This post was originally published on this site
U.S. long-term Treasury yields fell slightly on Thursday after the number of Americans filing for unemployment benefits continued to stay at elevated levels, underscoring the economic damage due to the COVID-19 pandemic.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 0.651% fell 0.5 basis point to 0.648%. The 2-year note yield TMUBMUSD02Y, 0.164% edged 0.4 basis point higher to 0.159%. The 30-year bond yield TMUBMUSD30Y, 1.386% ticked 0.5 basis point lower to 1.387%. Bond prices move inversely to yields.
What’s driving Treasurys?
The bond-market remained in a tight trading range as the Federal Reserve’s willingness to keep rates low for a sustained period have made it difficult for investors to successfully bet on big swings in interest rates.
Continued worries around the unabated spread of the COVID-19 pandemic across the majority of U.S. states has also weighed on hopes for a swift return to a pre-coronavirus economy.
In economic data, the number of Americans filing for new jobless claims fell by 99,000 to 1.314 million in the latest weekly period.
See: Jobless claims tell us 30 million people are unemployed, but many doubt it’s that bad
Investors are also waiting for the last auction of the week, with the Treasury Department set to sell $19 billion of debt in the afternoon. So far, market participants have managed to digest this week’s influx of new debt without pushing yields higher.
Here’s what market participants say
“Washington better get its act together and inject some more fiscal stimulus monies in to the economy or business and economic activity and jobs could sink back closer to those crushing record lows made back in April. We have never seen an economy lift out of recession when 1.3 million Americans apply for benefits in a week after they have been laid off from work,” said Chris Rupkey, chief financial economist for MUFG, in a note.
