Long-dated U.S. Treasury rates fell and prices gained some loft in thin trading Thursday, but government debt yields registered meager weekly moves in a holiday-shortened session and week, as investors were already positioning for trade in an uncertain 2021.
The U.S. bond market closed early at 2 p.m. ET and will stay shut on Friday in observance of Christmas.
What did Treasurys do?
The 10-year Treasury note yield TMUBMUSD10Y, 0.933% fell 2 basis points to 0.933%, while the 2-year note rate TMUBMUSD02Y, 0.120% edged 0.2 basis point higher to 0.121%. The 30-year bond yield TMUBMUSD30Y, 1.663%, known as the long-bond, slid 2.8 basis points to 1.669%.
For the week, the 10-year yield lost 1.4 basis points, and the 30-year shed 3 basis points, while the 2-year note put in a 0.2 basis point-fall.
What drove Treasurys?
Washington lawmakers were still haggling over a pandemic relief package on Monday, after President Donald Trump said he wanted the bill amended to include more generous direct checks to individuals.
On Thursday, House Republicans blocked a bill proposed by Democrats that would have sent $2,000 checks to individuals as part of the coronavirus financial-aid package.
Negotiators agreed on a Brexit trade deal on Thursday before the Dec. 31 deadline. The agreement caps years of uncertainty over the post-Brexit future of the U.K.-EU economic relationship.
Investors said they were now looking ahead to next year where the hope is a resolution to geopolitical concerns and widespread vaccine distribution will bolster the U.S. economic recovery.
What did market participants say?
“The 1% upper bound on the 10-year note is a line the doom and gloom crowd, and the ‘grab for yield’ investors, are likely to defend for some time, especially with lockdowns expanding in Europe and in some Asian countries,” said Steven Ricchiuto, chief U.S. economist at Mizuho.
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