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U.S. Treasury yields rose Thursday, after data showed a fall in weekly jobless claims and lawmakers sparked renewed hope for a coronavirus relief package deal, bolstering confidence that the economic recovery.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 0.868% rose 3.2 basis points to 0.847%, a mid-June high. The 2-year note rate TMUBMUSD02Y, 0.161% edged 0.6 basis point higher to 0.153%. The 30-year bond yield TMUBMUSD30Y, 1.679% climbed 3.1 basis points to 1.658%, its highest since June 8.
What’s driving Treasurys?
House Speaker Nancy Pelosi said on Thursday that negotiations on a spending package were “just about there.” At the same time, she cautioned that there still were key sticking points preventing an agreement.
Her comments helped to spark a bond selloff and modest stock-market gains on Thursday, with the 10-year Treasury yield pushing beyond the key 0.80% ceiling that has capped the benchmark maturity since June.
Progress continues to be made in the U.S. labor market, with first-time applications for unemployment benefits in the latest weekly period coming in at 787,000, the lowest since March, from 842,000. Continuing claims dropped 1.02 million to 8.37 million.
Existing-home sales increased for the fourth consecutive month in September, rising 9.4% from August to a seasonally-adjusted, annual rate of 6.54 million. Meanwhile, the Conference Board’s leading economic index rose 0.7% this month.
President Donald Trump and former Vice President Joe Biden will go head-to-head Thursday night in a debate in Nashville, Tenn., less than two weeks before the Nov. 3 presidential election.
See: Thursday’s presidential debate looks like the last-chance saloon for Trump, analysts say
Investors are expected to watch the second debate closely, after the first messy face-off in September saw a slide in support for Trump in the polls. The occasion could offer Trump one of his last chances to improve his re-election chances.
What did market participants say?
“Economic bears, as well as skeptics, of the recovery have been pointing to the stubbornly high jobless claims numbers. So, to see a drop to 787,000, it is kind of nice. This is a positive number,” said Patrick Leary, chief market strategist at Incapital, in an interview.
