Treasury prices slipped and yields edged higher Thursday as investors tentatively bought assets perceived as risky while monitoring developments in global trade tensions and wobbles in emerging markets. The trading action for government bond yields also came amid lackluster economic news.
What are yields doing?The yield on the 10-year Treasury note added 2.2 basis points to 2.849%, while the 2-year yield TMUBMUSD02Y, +0.34% fell 1.8 basis points to 2.522%. The yield on the 30-year Treasury bond TMUBMUSD30Y, +0.03% picked up 0.9 basis point at 2.980%. Bond yields and prices move in opposite directions.
What’s driving the market?Treasury yields turned higher Wednesday afternoon as a modicum of risk appetite returned to the markets, with the Dow Jones Industrial Average DJIA, +0.41% and the S&P 500 index SPX, +0.62% climbing, nudging traders out of the perceived safety of bonds.
Trade tensions between the U.S. and China, as well as between the U.S. and its other major trade partners, continue to run high.
Worries about the knock-on effects of elevated trade clashes have translated into turmoil for emerging markets. However, the iShares MSCI Emerging Markets ETF EEM, +0.85% rose 0.7%, but it has shed 2.9% so far this week and is on track for a 6.7% monthly fall.
What are analysts saying?“Tensions on EM markets will remain today’s main theme for trading. They appear to be the key concern for investors rather than the tit-for-tat trade threats and EU political issues,” wrote analysts at KBC Bank in Brussels.
What economic data are on tap?A revised look at first-quarter gross domestic product showed the U.S. economy grew at 2% annualized pace, marked down from an earlier estimate of 2.2%. The Labor Department said first-time claims for unemployment benefits rose 9,000 to 227,000 in the week ended June 23, exceeding the consensus forecast of 220,000 but still near the lowest level in a half-century.
