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Treasury prices rose, pushing yields lower, on Thursday after investors grappled with the potential threat of a euroskeptic policies in Italy and the impact of protectionism on a global economy already reeling from a strong dollar and higher interest rates in the U.S. The 10-year Treasury note yield(XTUP:TMUBMUSD10Y=X) fell by 2.9 basis points to 2.899%. The 2-year note yield(XTUP:TMUBMUSD02Y=X) was down 2.1 basis points to 2.541%, while the 30-year bond yield(XTUP:TMUBMUSD30Y=X) slipped 2.1 basis points to 3.043%.
Gold prices marked a third straight session decline on Thursday to carve out another low for 2018 as a leading dollar index—lifted in a rising interest-rate environment—tapped its highest level since last summer. Among exchange-traded funds, the SPDR Gold Trust (GLD) was nearly flat, while iShares Silver Trust (SLV) added 0.2%. The VanEck Vectors Gold Miners (GDX) rose 0.3%.
The yield on the benchmark 10-year Treasury note was lower at around 2.92 percent at 8:23 a.m. ET, while the yield on the 30-year Treasury bond slipped to 3.061 percent. Market-watchers have become increasingly jittery this week after President Donald Trump requested the United States Trade Representative to identify $200 billion worth of Chinese goods late Monday, for additional tariffs at a rate of 10 percent. Coming up Thursday, jobless claims and the Philadelphia Fed's manufacturing business outlook survey are both due out at 8:30 a.m. ET, followed by FHFA house price index data at 9 a.m. ET.
U.S. government bond prices declined Wednesday after Federal Reserve Chairman Jerome Powell said falling unemployment and faster inflation support additional interest rate increases. The yield on the benchmark 10-year Treasury note rose to 2.928% from 2.893% on Tuesday, posting its biggest one-day climb in two weeks. The yield on the two-year Treasury note rose to 2.562% from 2.545%.
Treasury prices fell Wednesday, pushing up yields, after Federal Reserve Chairman Jerome Powell reasserted the need for gradual rate increases, citing a tight labor market. This comes a day after an escalation in the tit-for-tat trade skirmish between China and the U.S. drove investors to flee to the perceived safety of government paper. Risky assets across the globe signaled that tariff-spooked markets were reassessing the threat of a trade war materializing between the world’s largest economies.
Gold futures settle lower on Wednesday and mark a fresh nadir for 2018 as overall strength in dollar diminishes appetite for the yellow metal.
The yield on the benchmark 10-year Treasury note was higher at around 2.906 percent at 7:45 a.m. ET, while the yield on the 30-year Treasury bond was in the black at 3.036 percent. Market-watchers have become increasingly jittery after President Donald Trump requested late Monday that the United States Trade Representative identify $200 billion worth of Chinese goods for additional tariffs, at a rate of 10 percent. If China "refuses to change its practices" and insists on continuing with the new tariffs it recently declared on the U.S., then the additional levies would be imposed on the Asian nation, Trump said.
Tuesday was no exception, with stocks down sharply on renewed worries about President Donald Trump’s trade feud with China. The stock market has some things going for it right now, of course. Economic growth appears to have picked up too, with the effects of a strong job market and the personal income-tax cuts many Americans received combining to drive consumer spending.
U.S. government bonds rallied Tuesday as President Donald Trump threatened to impose tariffs on some $450 billion in Chinese goods, ramping up a trade conflict between the world’s largest superpowers and sending investors rushing to assets perceived as safe. Against that backdrop, risk assets came under pressure while bond prices rose, driving yields lower. The 10-year Treasury note yield (XTUP:TMUBMUSD10Y=X) fell 3.3 basis points to 2.893%, slipping briefly below the 100-day moving average at 2.878%, their intersection has only occurred twice in the last nine months.
U.S. government debt prices jumped on Tuesday as concerns over a potential trade war between the U.S. and China intensified. The yield on the benchmark 10-year Treasury note fell to 2.877 percent from about 2.91 percent on Monday, while the yield on the 30-year Treasury bond was deep in the red at 3.011 percent. If China "refuses to change its practices" and insists on continuing with the new tariffs it recently declared, then the additional levies would be imposed on Beijing, Trump said Monday night.
U.S. government bond prices were little changed Monday as investors sized up political instability in Germany and the potential for rising trade tensions to drag on global economic growth. The yield on the benchmark 10-year Treasury note held steady at 2.926%, while the two-year note yield, which tends to move with expectations for Federal Reserve interest-rate policy, fell for a third consecutive session to 2.555% from 2.557%. Yields fell early in the session after German Chancellor Angela Merkel was handed a two-week ultimatum by her coalition partners, adding the country to the list of areas in the world with the potential to add instability to a turbulent geopolitical environment.
U.S. government bond yields struggled for direction Monday as stocks pared some of their losses from the open, sparked by escalating trade tensions between Washington and Beijing. President Donald Trump approved tariffs of 25% on about $50 billion of Chinese goods Friday, drawing retaliatory measures by China on U.S. goods of the same value. The modest bounceback helped to ease the flow of investors into haven assets such as U.S. government bonds.
Gold- and silver-backed ETFs move lowerAFP/What’s next for gold? Gold futures notched a modest gain on Monday, after a drop late last week that took the commodity to the lowest close of 2018, as trade tensions elevated global uncertainty, providing support for bullion prices. Global markets have focused on a growing trade spat between the U.S. and China.
Arturo Estrella, a former economist at the New York Federal Reserve, says the yield curve between the 10-year note and the 3-month T-bill is not flat enough to predict a recession next year. The economist co-authored several important research papers on the predictive powers of the yield curve. Call it "the unbearable flatness of yields" or "the trouble with the curve." However one cares to describe it, the slope of the Treasury yield curve has been the subject of much concern of late, as regards the future direction of the economy.
Foreign governments have pared back their holdings of U.S. debt, reducing the total by nearly $10 billion in March and April. Russia was notable among the group stepping back with a nearly 50 percent cut. The U.S. government needs buyers of its debt as the Fed continues to reduce its holdings and the budget deficit is projected to surge in coming years.
The Federal Reserve roiled markets after it announced its second interest rate hike of the year, even though the decision was widely expected. If the 10-year Treasury yield rises over 3 percent and marches toward 4 percent, a level it hasn't hit in a decade, investors may then begin to alter their outlooks for the economy and the market. After all, interest rates impact the economy from every angle, affecting spending by businesses and consumers and borrowing decisions, corporate buybacks, capital investment, earnings growth and more.
The yield on the benchmark 10-year Treasury note was lower at 2.913 percent as of 7:10 a.m. ET, while the yield on the 30-year Treasury bond slipped to 3.041 percent. On Friday, President Donald Trump announced that the U.S. would inflict tariffs that would impact up to $50 billion worth of Chinese goods.
U.S. government bond prices jumped Friday after a tariff fight between the U.S. and China intensified. Yields fell after the Trump administration said it would go ahead with a planned imposition of tariffs on $50 billion of imports from China. Officials in China said they would retaliate immediately, raising the potential for a trade war between the world’s two biggest economies.
Yield curve flattest since 2007Reignited fears of a trade war between the U.S. and China contributed to a move to the perceived safety of government paper. U.S. government bonds found support Friday, extending a yield decline for Treasurys as an escalating trade spat between the U.S. and China contributed to a move to the perceived safety of government paper. Short-dated yields, on the other hand, were elevated for the week after the Federal Reserve signaled its intentions to raise rates four times this year.
U.S. government debt prices rose on the final trading day of the week, as investors weighed an announcement by the Trump administration to possibly implement a 25 percent tariff on up to $50 billion in Chinese imports. The yield on the benchmark 10-year Treasury note was lower at around 2.91 percent at 8:40 a.m. ET, while the yield on the 30-year Treasury bond slipped to 3.029 percent. In a statement Friday, President Donald Trump said the measures would affect Chinese goods "that contain industrially significant technologies," without specifying those products.
U.S. stocks stabilized Thursday, suggesting investors are coming to terms with central banks’ plans to gradually leave behind a decade of unprecedented monetary stimulus. After the Federal Reserve signaled Wednesday that U.S. interest rates will likely go up four times in 2018—instead of three, as had been widely believed—the European Central Bank said Thursday it would end its bond-buying program in December. “The Fed and the ECB and other central banks have taken the market to places they’ve never been before, and now they want to gently nudge it back to somewhere closer to where it was in the past,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co.
Bond yields fell early Thursday after the ECB’s meeting. The yield on the 10-year Treasury note then pared declines, before drifting lower again after data showed retail sales rose more than expected in May and that the number of Americans filing new claims for unemployment benefits fell more than expected. Stephen Voss for The Wall Street Journal The U.S. Treasury Building in Washington. In comparison, the ECB’s decision not to raise interest rates until mid-2019 struck many analysts as dovish.
If recent data is any indication, the U.S. is on track to reap a sterling quarter of growth, but that hasn’t stopped the yield curve from flattening toward an inversion, a precursor to a recession. Bond investors appear skeptical that this bump in growth can persist as longer-dated yields continue to fall this week. An inversion of the curve, when short-dated yields edge above long-dated ones, has preceded every recession since World War II.
Treasury yields slipped Thursday after the European Central Bank issued a timetable for the end of its easy-money policies. This follows the Federal Reserve’s decision Wednesday to lift interest rates, as expected. The U.S. central bank also signaled that it would tighten monetary policy at a slightly faster clip than had previously been anticipated, with the domestic economy growing steadily.
Treasury yields on Thursday extended their decline as the European Central Bank laid out a schedule for paring back is asset-purchase program. The ECB indicated that it would end in December and signaled that it would join the Federal Reserve in tightening its benchmark interest rates at least until the summer of 2019. The 10-year Treasury note yield fell 3.8 basis points to 2.941%, while the 30-year bond yield slipped 4.8 basis points to 3.054%.