NEW YORK: US Treasury long-dated debt yields rose on Thursday, boosted by generally upbeat US economic data as well as remarks by the European Central Bank’s president that downplayed the impact of Britain’s move to exit the European Union.
US 10-year note yields, which move inversely to prices, climbed to four-week peaks, while that of US 30-year bonds
advanced to three-week highs. Long-dated yields climbed for a second straight session.
Thursday’s data showed US initial jobless claims hit a three-month low to a seasonally adjusted 253,000 for the week ended July 16. Mid-Atlantic factory activity, however, contracted but details showed new orders and employment were higher.
“The US data is actually quite good, and that pushed yields higher,” said David Keeble, global head of interest rates strategy at Credit Agricole in New York.
“I know the Philly Fed is a bit of a disappointment in the headline, but if you look behind the headline, the data is actually pretty good.”
ECB President Mario Draghi’s remarks on Thursday saying the euro zone has withstood the uncertainty and the spike in volatility associated with Brexit, helped US yields a little bit.
Italian bond yields rose to three-week high in the wake of Draghi’s comments.
The overall message, analysts said, was that Brexit’s impact has been more or less contained, suggesting global financial markets are starting to stabilize.
In mid-morning trading, benchmark US 10-year Treasury notes were down 10/32 in price for a yield of 1.614 percent, up from 1.580 percent late on Wednesday. Earlier, benchmark yields hit a high of 1.628 percent, its strongest level since June 24.
US 30-year bond prices fell more than a point in price to yield 2.352 percent, down from 2.296 percent late on Wednesday. The bond touched a three-week peak of 2.360 percent earlier in the session.
US two-year notes were little changed, yielding 0.722 percent.
Credit Agricole’s Keeble said US yields overall were helped by the spike in Japanese 30-year bond yields overnight. The 30-year bond yield rose as high as 7 basis points following the news.
The rise in yields came after news saying the Japanese government is preparing a package of economic stimulus measures totaling $190 billion or more.
Copyright Reuters, 2016
Courtesy : BRecorder