Tuesday, February 7, 2023

Long-term US Treasury yields edge lower after jobless claims

leek chuck mikolajczak

Nuevanew yorkDec. 29 – The yield on the 10-year US Treasury note was lower on Thursday after three straight days of gains, as labor market data showed new claims for jobless benefits rose last week.

* The Labor Department said initial jobless claims rose 9,000 to 225,000 on a seasonally-adjusted basis, in line with market expectations, while ongoing claims rose 41,000 to 1.71 million, the most since February.

* The yield on the 10-year Treasury note fell 2.2 basis points to 3.864%.

* The yield on 10-year debt has been rising since hitting a nearly three-month low on Dec. 7, as hopes grew that the Federal Reserve would signal the end of its rate-hike cycle.

* It posted its biggest weekly gain in 8 1/2 months, following monetary policy announcements from the US central bank, the Bank of England and the European Central Bank last week. Currently, the yield is on track for its biggest two-week gain in 1.5 years.

* Added to the pressure of recent days has China rescinded its “zero” covid“, which analysts see as rising inflationary pressures in the near term due to increased consumer demand.

* The yield on the 30-year Treasury note fell 2.6 basis points to 3.951%.

* The US central bank forecasts the federal funds rate will rise above 5% next year, while Fed Chairman Jerome Powell and other Fed officials have insisted rates need to be held long enough to completely eliminate high inflation. It may be necessary to keep at a higher level.

* The portion of the Treasury yield curve that measures the difference between the returns on two-year and 10-year debt, which is considered a proxy for economic expectations, stood at -51.0 basis points.

* Later Thursday the Treasury will auction $35 billion in seven-year bonds.

* The yield on two-year Treasury notes, which moves in step with interest rate expectations, rose 1.1 basis points to 4.370%.

Nation World News Desk
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