Investing.com – Treasury yields were headed lower Thursday with the 10-year United States 10-Year falling 7 basis points to 1.25%, a level not seen since February, as worries over the pace of global economic rebound increase and investors look for safe havens.
Yield on the United States 30-year bond United States 30-Year dropped by 8 basis points to 1.85%. The yield on the 5-year United States 5-Year note, more sensitive to expectations of short-term interest rate changes, was down 4 basis points to 0.73%.
Yields move inversely to prices and 1 basis point is one hundredth of a percent.
Even as vaccinations quicken and people return to work and travel, the fast spread of the Delta variant of the coronavirus is the latest headache for policymakers, bankers and economists in balancing growth and inflation targets.
Japan declared a state of emergency today in Tokyo, just two weeks before the capital hosts the Summer Olympic Games.
The sharp reversal in yields comes after they made new highs in March when worries over inflation were dominant. Those worries are still not over but for now, it’s sharing the space with concerns over GDP growth.
The U.S. Federal Reserve on Wednesday issued the minutes of its June 15-16 meeting. It revealed that Fed officials believe “substantial progress” toward the “Committee’s maximum employment and price stability goals” is yet to be reached. They did call for a prudent reduction in the pace of asset purchases.
Some say the fall could be technical. Some traders told Reuters the move this week was due to an unwind of bets by hedge funds. A weekly survey of JPMorgan (NYSE:JPM) clients on July 6 showed that net bearish bets against Treasuries fell to their lowest level since April.
Source: Economy - investing.com
