U.S. Treasury prices climbed on Friday, pushing the 10-year yield to a three-week low, as stocks globally resumed a downward trend that has underpinned appetite for the perceived safety of government paper.
What are yields doing?
The yield on the 10-year Treasury note TMUBMUSD10Y, -1.20% fell to 3.092% from 3.136% late Thursday in New York, with its present level putting it around the lowest yield since Oct. 2, according to FactSet data.
Meanwhile, the 2-year Treasury note TMUBMUSD02Y, -1.42% was yielding 2.819%, down from 2.863%, a day ago, and also marking a roughly three-week nadir. The 30-year Treasury bond yield TMUBMUSD30Y, -0.87% was at 3.317% versus 3.348% on Thursday.
Bond yields fall as prices rise.
What’s driving the market?
Bond yields have been largely keeping pace with moves in stocks, falling Friday as fears about global economic growth have reasserted themselves, reflected in a broad slump in stock markets world-wide.
China’s yuan USD, +5.18% also crept toward its lowest level against the dollar in about a decade, underscoring weakness in the world’s second-largest economy which is locked in a tit-for-tat trade dispute with the U.S. Futures for the Dow Jones Industrial Average YMZ8, -0.93% and the S&P 500 index ESZ8, -1.20% were set to open lower and European equity bourses were declining sharply across the board.
Later Friday morning, U.S. government debt investors will watch two key economic reports that could help to shed light on the current state of the domestic economy: A first reading of third-quarter gross domestic product is expected just ahead of the open at 8:30 a.m. Eastern Time, followed by a consumer-sentiment index at 10 a.m.
On Thursday, investors keyed in on the European Central Bank, which chose to leave its policy statement virtually unchanged from last month, as expected. ECB President Mario Draghi reaffirmed plans to wind down quantitative easing in December, as investors were buffeted by Italy’s budget clash with the European Union and a lack of progress from negotiations around Britain’s exit from the economic bloc.