Treasuries Move To The Upside Amid Lingering Coronavirus Concerns
After ending the previous session modestly higher, treasuries saw some further upside during the trading day on Thursday.
Bond prices jumped at the start of trading and remained firmly positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.9 basis points to 0.694 percent.
Lingering concerns about a second wave of coronavirus infections contributed to the strength among treasuries amid the rising number of cases in Beijing as well as several U.S. states.
Beijing has reportedly closed schools and canceled flights to contain the latest coronavirus outbreak, which has purportedly led to more than 100 new confirmed cases.
Meanwhile, CNN analysis of data from Johns Hopkins University found ten U.S. states are seeing their highest seven-day average of new coronavirus cases per day since the pandemic started.
CNN said the states seeing record-high averages are Alabama, Arizona, California, Florida, Nevada, North Carolina, Oklahoma, Oregon, South Carolina and Texas.
The rising number of new cases in Oklahoma has not dissuaded President Donald Trump from plans to hold a massive indoor rally in Tulsa on Saturday.
Treasuries also benefited from a Labor Department report showing first-time claims for U.S. unemployment benefits fell by much less than expected in the week ended June 13th.
The Labor Department said initial jobless claims dropped to 1.508 million, a decrease of 58,000 from the previous week’s upwardly revised level of 1.566 million.
Economists had expected jobless claims to tumble to 1.300 million from the 1.542 million originally reported for the previous week.
On the other hand, the Philadelphia Federal Reserve released a separate report showing an unexpected expansion in regional manufacturing activity in the month of June.
The Philly Fed said its diffusion index for current general activity soared to a positive 27.5 in June from a negative 43.1 in May, with a positive reading indicating an expansion in regional manufacturing activity.
Economists had expected the index to show a much more modest increase to a negative 23.0, which would have still indicated a contraction.
A lack of major U.S. economic data may keep some traders on the sidelines on Thursday, although comments by several Federal Reserve officials are likely to attract some attention.