Ten-Year Yield Closes Below 4.0% For The First Time Since Early April
(RTTNews) - Treasuries showed a lack of direction early in the session on Thursday but showed a notable move to the upside over the course of the trading day.
Bond prices climbed firmly into positive territory in late-morning and early-afternoon trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 7.0 basis points to 3.976 percent.
With the decrease on the day, the ten-year yield closed below 4.0 percent for the first time since early April and ended the day at its lowest closing level in a year.
The strength that materialized among treasuries came as stocks on Wall Street came under pressure over the course of the session.
The pullback on Wall Street was attributed to the emergence of concerns about bad loans following the recent bankruptcies of two auto industry-related companies First Brands and Tricolor Holdings.
"When you see one cockroach, there are probably more," JPMorgan CEO Jamie Dimon said during the financial giant'searnings conference callearlier this week.
Regional banks Zions Bancorp (ZION) and Western Alliance (WAL) have plunged amid concerns about band loans, while Jefferies (JEF), which has some exposure to First Brands, has also tumbled.
Treasuries have also benefitted from the appeal as a safe haven following the release of some disappointing U.S. economic data, with a report from the Federal Reserve Bank of Philadelphia showing a substantial pullback by its reading on regional manufacturing activity in the month of October.
The Philly Fed said its diffusion index for current general activity plummeted to a negative 12.8 in October after spiking to a positive 23.2 in September, with a negative reading indicating contraction. Economists had expected the index to slump to a positive 10.0.
With the week largely devoid of key U.S. economic data due to ongoing government shutdown, data like the Philly Fed index has attracted increased attention.
