US Treasury yields fall as equities decline and oil prices rise
Investors sought safety in US Treasuries on Thursday as equity indexes dropped and oil prices recovered some losses.
US Treasury yields declined during a volatile session on Thursday as equity indexes fell and oil prices partially recovered from previous losses, according to the Economic Times.
Investors moved toward safety as they moderated expectations that the US midterm elections would accelerate peace efforts in the Middle East. This follows Wednesday, when American voters gave control of Congress to the Democratic party, a move seen as a rebuke of the Republican administration and President Donald Trump, who began the war with Iran eight months ago.
Mike Lorizio, head of US rates and mortgage trading at Manulife Investment Management, said the realization is that the issue cannot be easily resolved. He noted that voter dissatisfaction does not mean the situation will automatically reach a conclusion soon, which contributed to the price reversal.
Labor market data showed resilience as the number of Americans filing for unemployment reached a 57-year low. The Labor Department reported that initial state unemployment claims dropped by 6,000 to a seasonally adjusted 189,000 for the week ending October 31, which was lower than the 196,000 economists had predicted.
Federal Reserve officials provided commentary on Thursday. Cleveland Federal Reserve President Beth Hammack stated the central bank has more work to do to reach the 2% inflation target, while Richmond Fed President Tom Barkin suggested a gradual pace of rate increases would be sensible given current price pressures.
In the bond market, the benchmark 10-year Treasury note yield fell 4.9 basis points to 4.843%. The 30-year bond yield decreased by 3 basis points to 5.25%, and the two-year Treasury yield dropped 5.6 basis points to 4.525%.
