Treasuries Inch Higher Amid Concerns About Spike In Coronavirus Cases
Treasuries gave back some ground after an early move to the upside on Thursday but managed to remain in positive territory throughout the day.
Bond prices moved roughly sideways in afternoon trading, hovering modestly above the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1 basis point to 0.674 percent.
The modest uptick by treasuries came amid renewed concerns about a spike in coronavirus cases after California, Texas and Florida all reported their biggest single-day increases in cases.
According to a tally by NBC News, the U.S. saw a record 45,557 reported Wednesday, surpassing the peak seen during the first wave of the coronavirus on April 26th.
Traders may be worried about the possibility of states reimposing restrictions on businesses, although the Trump administration has ruled out another lockdown.
Texas Governor Greg Abbott announced that the state will pause its reopening plan due to the recent jump in coronavirus cases.
On the economic front, a report from the Labor Department showed a much smaller than expected drop in initial jobless claims in the week ended June 20th, but the report also showed a notable decrease in continuing claims.
Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, tumbled by 767,000 to 19.522 million in the week ended June 13th, hitting their lowest level since mid-April.
A separate report from the Commerce Department also showed a substantial rebound in durable goods orders in the month of May.
The Commerce Department said durable goods orders spiked by 15.8 percent in May after plunging by a revised 18.1 percent in April.
Economists had expected durable goods orders to surge up by 10.9 percent compared to the 17.7 percent nosedive that had been reported for the previous month.
Excluding a significant rebound in orders for transportation equipment, durable goods orders still jumped by 4.0 percent in May after tumbling by 8.2 percent in April. Economists had expected a 2.5 percent increase.
Meanwhile, the Treasury Department revealed that that its auction of $41 billion worth of seven-year notes attracted average demand.
The seven-year note auction drew a high yield of 0.511 percent and a bid-to-cover ratio of 2.49 ,while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.48.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
News on the coronavirus front may remain in focus on Friday, overshadowing reports on personal income and spending and consumer sentiment.