Treasury prices rose on Wednesday as investors’ concerns over the weakening pace of the global economic recovery returned. The Federal Reserve’s decision Tuesday to expand its scope of operations to include reinvesting principal payments into Treasuries, in an effort to revive the economy, continues to resonate across market participants who were reminded of the Bank of Japan’s “quantitative easing” policies that failed to boost that country’s economy in the early 2000s. Also, China announced that its industrial output rose at the lowest level since the first half of 2009 indicating that the world’s third largest economy may also be showing signs of an economic deceleration.
By the end of the day, the world equity markets had tumbled with most European indices dropping at least 2.00%. The Dow Jones lost 265 points for the day to close at 10,378 (-2.49%) while the S&P 500 declined 2.82% or 31 points to 1,089. On the other hand bond prices roses, the benchmark 2-year note rose 1/32 to yield 0.50% while the 5-year note gained 3/32 to yield 1.43%. The 10-year note reached its lowest yield since March 2009 gaining 22/32 at 2.68%. The long bond rose 1 18/32 of a point to yield 3.92%.
Treasury prices are showing a mixed performance this morning with the short end of the curve trading at yesterday’s levels and the intermediate and long end continuing to rise in value. The 2-year and 5-year notes continue to yield 0.51% and 0.78% respectively while the 10-year benchmark has gained 4/32 to yield 2.69. The long bond has further appreciated 5/32 in value to yield 3.91%. For the record, the Bureau of Labor Statistics of the U.S. Department of Labor reported today that the U.S. Import Price Index, which measures the change in imported prices of non-military goods and services traded into the U.S. rose 0.20% in July, primarily driven by fuel-import prices which registered a 2.10% gain in the period. The annual change was 4.90% versus the expected 5.00%. The decrease in prices was also led by a 14.8% YoY increase in fuel prices.
Additionally, the Department of Labor released this morning its weekly Initial Jobless Claims report showing that first time claims were slightly higher than expected at 484,000 with analyst’s estimates of a 465,000 increase. However, the Continuing Claims report showed a slightly lower than expected reading at 4.452 million versus the expected 4.535 million. Meanwhile, the more stable 4-week average number of Initial Claims rose well past the previous 2 week’s 450,000 level at 473,500. Finally, the Treasury department will auction $16 billion of a 30-year bond at noon CDT. This auction will be the last of a 3 part $74 billion offering this week.
By the end of the day, the world equity markets had tumbled with most European indices dropping at least 2.00%. The Dow Jones lost 265 points for the day to close at 10,378 (-2.49%) while the S&P 500 declined 2.82% or 31 points to 1,089. On the other hand bond prices roses, the benchmark 2-year note rose 1/32 to yield 0.50% while the 5-year note gained 3/32 to yield 1.43%. The 10-year note reached its lowest yield since March 2009 gaining 22/32 at 2.68%. The long bond rose 1 18/32 of a point to yield 3.92%.
Treasury prices are showing a mixed performance this morning with the short end of the curve trading at yesterday’s levels and the intermediate and long end continuing to rise in value. The 2-year and 5-year notes continue to yield 0.51% and 0.78% respectively while the 10-year benchmark has gained 4/32 to yield 2.69. The long bond has further appreciated 5/32 in value to yield 3.91%. For the record, the Bureau of Labor Statistics of the U.S. Department of Labor reported today that the U.S. Import Price Index, which measures the change in imported prices of non-military goods and services traded into the U.S. rose 0.20% in July, primarily driven by fuel-import prices which registered a 2.10% gain in the period. The annual change was 4.90% versus the expected 5.00%. The decrease in prices was also led by a 14.8% YoY increase in fuel prices.
Additionally, the Department of Labor released this morning its weekly Initial Jobless Claims report showing that first time claims were slightly higher than expected at 484,000 with analyst’s estimates of a 465,000 increase. However, the Continuing Claims report showed a slightly lower than expected reading at 4.452 million versus the expected 4.535 million. Meanwhile, the more stable 4-week average number of Initial Claims rose well past the previous 2 week’s 450,000 level at 473,500. Finally, the Treasury department will auction $16 billion of a 30-year bond at noon CDT. This auction will be the last of a 3 part $74 billion offering this week.
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