Bond Prices Rise as Safety-Buying Resumes | Glenrock Gazette

Bond Prices Rise as Safety-Buying Resumes

US Treasury prices rallied Thursday with the long bond leading while the 2-year dragged as risk-off trades resumed, but prices were off the highs. Trade uncertainties remain supportive of safety-buying along with hopes for central bank accommodation, as equities also posted modest gains.

The 10-year yield was near 2.105% from 2.123% Wednesday and the 2-year unchanged near 1.84%. Core European bonds were lagging into the European Central Bank policy announcement, which kept rates on hold with plans to remain stable through mid-2020.

A lack of progress in US-Mexico trade talks added to the risk aversion backdrop. Along with trade worries, Mexico was hit by a ratings downgrade by Fitch and a warning from Moody’s. Meanwhile, German orders data were better than expected. India cut rates 25 bps as expected.

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The European Central Bank (ECB) left policy rates unchanged, as expected, while the guidance on rates was pushed back with the central bank now saying that rates will remain unchanged at least until the middle of next year.

Thursday’s calendar offers some useful numbers with the Challenger job cuts report at 7:30 am ET, the weekly initial jobless claims, April trade data, first-quarter productivity and unit labor costs reports all due at 8:30 am.

The Treasury will offer details on Monday’s 3- and 6-month bill auctions at 11 am, along with those for the June 11 new 3-year note, June 12 reopened 10-year, and the June 13 reopened 30-year bond sales.

There will be $45 billion 4- and $35 billion 8-week bills on the block at 11:30 am.

Federal Reserve speakers remain on the march with Dallas President Robert Kaplan speaking at 8:40 am with New York’s John Williams opening an event at the Council of Foreign Relations at 1 pm.