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Chuck Mikolajczak contributed to this article.
Reuters, NEW YORK, July 8 – On Thursday, 10-year Treasury yields fell to their lowest levels in over five months, as investors worried that the best part of the economic rebound might be over.
The yield on the 10-year note is on track to fall for an eighth consecutive session, the longest run since a nine-session decrease that ended on March 3, 2020, as the COVID-19 pandemic in the United States gained traction.
Recent labor market and services sector data have given investors pause, indicating that the economy may not be strengthening as quickly as expected, and that some underlying weakness may be forming.
Initial jobless claims unexpectedly increased for the week on Thursday, according to Labor Department data, though the overall trend continues to improve.
The difference between the rates on two- and 10-year Treasury notes, which is seen as a measure of economic forecasts, was at 107.9 basis points after falling to as low as 104.2 basis points, the smallest since Feb. 12.
“When the curve flattens out too quickly, people start to doubt the macro story,” said Steven Ricchiuto, U.S. chief economist at Mizuho Securities USA LLC in New York.
The Fed’s June 15-16 meeting minutes revealed that officials considered “significant further progress” on the economic recovery had not yet been achieved, but that they needed to be ready to act if inflation or other threats arose.
“Even if the Federal Reserve wasn’t pessimistic, it was bearish enough to push everything over the brink,” Ricchiuto said.
The Delta variation of COVID-19, volatility in oil prices, and a market that has been predominantly positioned short have all been highlighted by analysts as grounds for growing concerns about economic growth prospects and increased risk-off attitude.
After hitting a low of 1.25 percent on Feb. 16, the yield on 10-year Treasury notes fell 4.6 basis points to 1.275 percent.
The 30-year Treasury note yield fell 5 basis points to 1.894 percent after falling to 1.856 percent, its lowest level since February 2.
Thursday, July 8th, 10:49 a.m. in New York / 1449 a.m. in London
Price
T BONDS IN THE U.S. SEP1 133-248/256 0-108/25 6 Price SEP1 164-9/32 1 10YR TNotes SEP1 133-248/256 0-108/25 6 Price SEP1 164-9/32 1 10YR TNotes SEP1 133-248/ Percentage Change in Current Net Yield (bps)
0.0525 0.0532 0.000 0.0525 0.0532 0.000 0.0525 0.0532 0.000 0.0525 0.0532
0.05 0.0507 -0.005 0.05 0.0507 -0.005 0.05 0.0507 -0.005 0.05 0.0507
Note with a two-year maturity of 99-221/256 0.022 0.01944 0.01944 0.01944 0.01944 0.0
99-174/256 0.3598 -0.037 -0.037 -0.037 -0.037 -0.037 -0.037 -0.037 -0.0
100-174/256 0.7356 -0.044 -0.044 -0.044 -0.044 -0.044 -0.044 -0.044 -0.0
101-96/256 1.0451 -0.048 seven-year note
1.2745 -0.046 10-year note 103-60/256 1.2745 -0.046
110-236/256 1.8942 -0.050 30-year bond 110-236/256 1.8942 -0.050
SWAP DOLLAR SPREADS
Finally (bps) Change in the net (bps)
8.00 0.25 spread on a two-year dollar swap in the United States
The spread on a three-year dollar swap in the United States is 11.75 percent.
8.00 0.25 spread on a 5-year dollar swap in the United States
-1.25 1.00 spread on a 10-year dollar swap in the United States
-29.50 1.75 spread on a 30-year dollar swap in the United States
(Chuck Mikolajczak contributed reporting.)
Mark Heinrich edited the piece.)/n
