Long-Term Yields Move to New Lows
Treasuries ended an uneventful session narrowly mixed. Long-maturity issues rose, dropping their yields to new lows for the year. But short-maturity issues fell, lifting their yields off the best-of-the-year levels they reached yesterday.
No major economic indicators were released, and the stock market, which has strongly influenced bond prices lately, didn't do enough to move them today.
The benchmark 10-year
Treasury note rose 3/32 to 103 9/32, dropping its yield 1.3
basis points to 5.311%. The two- and five-year notes fell, lifting their yields by 1 to 2 basis points.
The 30-year
Treasury bond rose 8/32 to 110 24/32, lowering its yield 1.6 basis points to 5.507%.
At the
Chicago Board of Trade
, the March
Treasury futures contract rose 5/32 to 103 23/32.
Tomorrow brings the November edition of the
employment report
(
definition |
chart |
), the most important economic indicator.
In the early hours of the session, Treasuries rallied on a rumor, which proved not to be true, that the jobs report had been inadvertently released ahead of schedule, and that it showed a rise in nonfarm payrolls of only about 50,000. Economists polled by
Reuters
are forecasting a much more modest slowdown in the pace of job growth, to 140,000 on average. In October, the average pace of job growth over the previous year was 195,000.
A major slowdown in the pace of job growth would be positive for Treasuries because it would indicate slowing economic growth. That could potentially prompt the
Fed to lower interest rates, and bond yields would presumably follow, lifting bond prices.
The early rally collapsed, but Treasuries rallied again in the afternoon. John Canavan, market analyst at
Stone & McCarthy Research Associates
in Princeton, attributed it to optimism about the prospect that the jobs report will show that growth is slowing and labor-market conditions are easing.
Economic Indicators
In economic news,
initial jobless claims
(
definition |
chart |
source
) fell to 352,000 in the latest week from 361,000 the previous week, a slight tightening of labor-market conditions that have eased considerably by this measure since the spring. The four-week average rose to 345,250, the highest in nearly a year and a half, from 344,000.
Currency and Commodities
The dollar rose against the yen and the euro. It lately was worth 110.46 yen, up from 110.34. The euro was worth $0.8898, down from $0.8913. For more on currencies, see
TSC's
Currencies column.
Crude oil for January delivery at the
New York Mercantile Exchange
fell to $29.35 a barrel from $29.85.
The
Bridge Commodity Research Bureau Index
fell to 230.98 from 232.05.
Gold for March delivery at the
Comex
fell to $276.10 an ounce from $277.30.
