U.S. Treasury yields rose slightly in early Thursday trade amid anticipation the Biden administration would press forward with additional fiscal spending measures.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 1.102% rose 1.1 basis points to 1.099%, while the 2-year note rate TMUBMUSD02Y, 0.149% was flat at 0.147%. The 30-year bond yield TMUBMUSD30Y, 1.823% added 0.5 basis point to 1.823%. Bond prices move inversely to yields.
What’s driving Treasurys?
U.S. Treasuries came under pressure the start of Thursday after news reports indicated President-elect Joe Biden would propose $2 trillion of additional spending to see the economy through the pandemic.
However, U.S. weekly jobless benefit claims rose by 181,000 to 965,000 in early January while continuing state jobless claims climbed 199,000 to 5.07 million, reflecting the impact of the latest business lockdowns to combat the coronavirus pandemic.
Still, many are looking out into the future when widespread vaccine distribution will allow large parts of the economy to reopen and contribute to the recovery.
Investors will continue to eye the Federal Reserve. Recent comments by some members of the policymaking committee have heightened market fears the central bank could taper its asset purchases sooner than expected.
But Fed Gov. Lael Brainard and Vice Chairman Richard Clarida have said they anticipate the Fed’s bond-buying program to stay at the current pace throughout 2021.
Fed chairman Jerome Powell is due to make a speech at 12.30 p.m. ET Thursday.
House lawmakers voted to impeach President Donald Trump for the second time. A final vote in the Senate, however, was not likely to arrive before President-elect Joe Biden’s inauguration, said Senate Majority Leader Mitch McConnell, R-Ky.
What did market participants say?
” The modest nature of [Thursday’s overnight selloff] could reflect uncertainty as to whether the Democrats will be able to muster the necessary support of their more moderate members to ensure the passage of their bolder plans through the Senate. It could equally reflect the fact that, in the wake of the recent sell-off, a push toward more fiscal support is already in the price,” said analysts at Rabobank.