Treasuries Pull Back Off Best Levels But Still Close Higher
Treasuries gave back some ground after an early move to the upside but managed to end the day firmly in positive territory.
Bond prices moved notably higher in early trading before pulling back in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.9 basis points to 1.740 percent.
The ten-year yield climbed off its intraday low of 1.715 percent but still ended the session at its lowest closing level in well over a month.
Treasuries initially benefited from their appeal as a safe haven amid lingering concerns about the impact of the Chinese coronavirus.
Despite efforts to contain the outbreak, deaths from the new coronavirus have risen to 17, with nearly 600 cases confirmed worldwide.
However, treasuries pulled back off their best levels after the World Health Organization said it is still too early to declare the outbreak a Public Health Emergency of International Concern.
“Make no mistake, this is an emergency in China. But it has not yet become a global health emergency,” said WHO Director-General Tedros Adhanom Ghebreyesus.
The WHO noted an emergency committee stands ready to be reconvened to reconsider formally declaring the situation a PHEIC.
“At this time, there is no evidence of human-to-human transmission outside China, but that doesn’t mean it won’t happen,” Tedros said.
In U.S. economic news, the Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended January 18th.
The report said initial jobless claims rose to 211,000, an increase of 6,000 from the previous week’s revised level of 205,000.
Economists had expected jobless claims to climb to 215,000 from the 204,000 originally reported for the previous week.
Meanwhile, a separate report from the Conference Board showed a slightly bigger than expected decrease by its index of leading U.S. economic indicators.
The Conference Board said its leading economic index fell by 0.3 percent in December after inching up by a revised 0.1 percent in November
Economists had expected the leading economic index to dip by 0.2 percent compared to the unchanged reading originally reported for the previous month.
Amid a quiet day on the U.S. economic front, trading on Friday may be impacted by the latest news regarding the coronavirus outbreak.
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