US Markets

Yields rise on positive economic reports

Credit: REUTERS/MOHAMED ABD EL GHANY

U.S. Treasury yields rose on Thursday as a range of reports indicated continued economic growth.

By Ross Kerber

BOSTON, Dec 5 (Reuters) - U.S. Treasury yields rose on Thursday as a range of reports indicated continued economic growth.

The benchmark 10-year yield US10YT=RR was four basis points higher at 1.8207 in morning trading, reflecting increased investor appetite for risk.

Analysts pointed to factors including a fall in weekly jobless claims and a decline in the U.S. trade deficit, which suggested trade could contribute to economic growth in the fourth quarter.

In addition, oil prices rose on Thursday ahead of an OPEC meeting expected to lead to deeper output cuts.

"All the factors are laying out better-than-expected economic growth," said Stan Shipley, research analyst at Evercore ISI. "Everything is going one way here," he said.

The two-year yield typically moves in step with interest rate expectations. On Thursday morning it was up 1.8 basis points to 1.6024%.

Thursday's trading marked the second day of higher yields after relatively positive comments by U.S. President Donald Trump raised hopes of a trade agreement with China, the most unpredictable factor in the market, and Wall Street's main indexes also rose.

The Commerce Department said the trade deficit tumbled 7.6% to $47.2 billion, the smallest since May 2018, as both imports and exports of goods declined. It was the second straight monthly fall in the trade bill and the percent drop was the biggest since January.

While Washington and Beijing are working on a "phase one" trade deal, the United States has ratcheted up tensions with other trade partners.

Despite the trade tensions there are few signs they are affecting the labor market. In a separate report on Thursday, the Labor Department said initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 203,000 for the week ended Nov. 30, the lowest since mid-April.

The claims data has no bearing on November's employment report, which is scheduled for release on Friday.

Price

Current Yield %

Net Change (bps)

Three-month bills US3MT=RR

1.52

1.5512

-0.008

Six-month bills US6MT=RR

1.5225

1.5598

-0.002

Two-year note US2YT=RR

99-205/256

1.6024

0.018

Three-year note US3YT=RR

100-4/256

1.6194

0.027

Five-year note US5YT=RR

99-78/256

1.6459

0.040

Seven-year note US7YT=RR

99-36/256

1.7563

0.040

10-year note US10YT=RR

99-92/256

1.8207

0.040

30-year bond US30YT=RR

102-100/256

2.2646

0.036

DOLLAR SWAP SPREADS

Last (bps)

Net Change (bps)

U.S. 2-year dollar swap spread

1.50

0.25

U.S. 3-year dollar swap spread

-2.75

0.00

U.S. 5-year dollar swap spread

-3.25

0.00

U.S. 10-year dollar swap spread

-7.50

0.25

U.S. 30-year dollar swap spread

-33.75

0.25

(Reporting by Ross Kerber; Editing by Steve Orlofsky )

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest US Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More