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July 10, 2020, 4:18 p.m. EDT

30-year Treasury yield books biggest weekly drop in a month

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U.S. Treasury yields rebounded on Friday as concerns about the impact of rising American coronavirus cases temporarily ebbed, pulling investors into stocks at the expense of government bonds.

Still, the story for the week was that long-term yields fell as investors lowered their growth expectations in the face of an unrelenting pandemic.

<STRONG>What are Treasurys doing?</STRONG>

The 10-year Treasury note yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y 0.00% rose 2.8 basis points to 0.633%, a day after closing at its lowest since April 24. Friday’s increase trimmed the benchmark maturity’s weekly rise to 3.7 basis points.

The 2-year note rate /zigman2/quotes/211347045/realtime BX:TMUBMUSD02Y 0.00% was virtually unchanged at 0.153%, while the 30-year bond yield /zigman2/quotes/211347052/realtime BX:TMUBMUSD30Y 0.00% rose 1. 8 basis points to 1.326%, trimming its weekly drop to 10.5 basis points, its largest such move in a month. Bond prices move inversely to yields.

<STRONG>What’s driving Treasurys?</STRONG>

New coronavirus cases in the U.S. rose by more than 63,000, another single-day record, on Thursday. California, Florida and Texas, states which combined contribute to more than a quarter of the U.S.’s annual economic output, reported their largest daily increase in deaths since the coronavirus crisis began.

This week’s round of U.S. Treasury auctions demonstrated the strong demand for safe assets, amid worries that the COVID-19 pandemic is stalling what had been a speedy economic recovery after lockdowns were eased.

Still, the ascendant momentum in U.S. equities on Friday helped to sap some of the bullish trading in the bond-market, with the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.06% and Dow /zigman2/quotes/210598065/realtime DJIA +0.17% logging weekly gains.

Aiding the buoyant tone in stocks, Gilead /zigman2/quotes/210293917/composite GILD +0.78%   said a new analysis  of previously disclosed clinical trial data found its experimental therapy remdesivir could reduce the risk of mortality in COVID-19 patients.

In economic data, U.S. producer prices fell 0.2% in June , leaving it lower 0.8% since last June. Reduced demand has led retailers and businesses to cut the price of goods to draw reluctant consumers, alleviating inflationary pressures.

What did market participants say?

“The bond market generally reads the economy better than the equity market. When you see a grab for yield in the long-end, you know [the bond-market] is concerned” about the rising infections in the U.S., said Tim Magnusson, senior portfolio manager at Garda Capital Partners, in an interview.

/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
0.57
0.00 0.00%
Volume: 0.00
Aug. 7, 2020 4:59p
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/zigman2/quotes/211347045/realtime
add Add to watchlist BX:TMUBMUSD02Y
BX : Tullett Prebon
0.14
0.00 0.00%
Volume: 0.00
Aug. 7, 2020 4:57p
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/zigman2/quotes/211347052/realtime
add Add to watchlist BX:TMUBMUSD30Y
BX : Tullett Prebon
1.24
0.00 0.00%
Volume: 0.00
Aug. 7, 2020 4:59p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,351.28
+2.12 +0.06%
Volume: 2.28B
Aug. 7, 2020 5:10p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,433.48
+46.50 +0.17%
Volume: 324.93M
Aug. 7, 2020 5:10p
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/zigman2/quotes/210293917/composite
US : U.S.: Nasdaq
$ 69.35
+0.54 +0.78%
Volume: 8.07M
Aug. 7, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
3.92%
Market Cap
$86.95 billion
Rev. per Employee
$2.02M
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