U.S. government bond yields fell on Thursday as Wall Street fell into a shortened trading session.
The 10-year benchmark Treasury yield closed at 0.933%, an increase of 0.953% on Wednesday, according to Tradeweb. The yield on the 30-year bond fell from 1.697% at the end of the previous session to 1.669%.
The bond market closes at 2 pm. and closed on Thursdays and Fridays for Christmas holidays.
Revenues, which had fallen when bond prices rose, fell after the European Union reached a trade agreement with Britain that ended more than four years of uncertainty between the United States’ two main allies. However, action on prices was minimal, indicating a similar decline earlier this week as investors rejected new stimulus measures after Congress passed the $900 billion Covid-19 rescue package that includes direct payments to households, business support and more. The fate of this package is now uncertain after President Trump’s criticism.
Investors are following the recent development of a new aid programme for the coronavirus. Capitol building.
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Treasury returns usually remain within a range, due to the stimulus efforts of the Federal Reserve and investors’ uncertainty about when a vaccine-driven recovery will occur.
The hope of ending the coronavirus crisis returned to a multi-month high in November as pharmaceutical companies announced successful vaccination trials.
Since then, the ten-year return, a barometer of the financial markets, has failed to break through the symbolic 1% level. It generally increases when investors are optimistic about growth and inflation, or decreases when their outlook deteriorates. US government bonds have rarely been as popular as they were during this year’s pandemic, causing yields to fall as investors sought safe havens and the Federal Reserve intervened to stabilise fixed income markets. The return over 10 years is now almost a percentage point lower than last year’s 1.909%.
A wave of covado cases around the world and signs of weakening economic data temper investors’ expectations and keep them in ultra-safe government bonds. While most Wall Street bank analysts expect the economy to improve significantly in 2021, they expect the weak data to weigh on the economy in the coming months because of Covid-related constraints.
U.S. household spending fell for the first time in seven months, the Commerce Department said Wednesday. Consumers reduced their spending by 0.4%. The weaker than expected data comes a week after the US retail sector – a measure of how much money Americans spend on cars, groceries, gasoline and other goods – fell 1.1% in November.
Send an e-mail to Julia-Ambre Verlaine at Julia.Verlaine@wsj.com.
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