U.S. Government Bonds Advance on Weaker Data

FeaturesDow Jones Newswires

U.S. government bonds edged higher Thursday after tepid economic data.

The yield on the benchmark 10-year U.S. Treasury note yield fell to 2.488%, according to Tradeweb, from 2.497% Wednesday. Bond yields fall as prices rise.

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Yields traded within a narrow range after data showing jobless claims rose and the economy grew slower in the third quarter than first estimated.

U.S. output grew at a 3.2% annual rate in the third quarter, according to a revised estimate by the Commerce Department released Thursday. The prior estimate was 3.3%. Initial jobless claims, a proxy for layoffs across the U.S., rose by 20,000 to a seasonally adjusted 245,000 in the week ended Dec. 16, the Labor Department said Thursday. Economists surveyed by The Wall Street Journal expected 230,000 new claims last week.

With the weaker data, the recent impetus to sell "has kind of subsided," said Thomas di Galoma, head of Treasury trading at Seaport Global Holdings.

The 10-year yield this week reached its highest levels since March, as investors debated whether the run-up will endure or whether it's a byproduct of thin holiday trading, when many traders and investors are out of the office.

"One of the issues markets are having is there just aren't enough people out there" to ratify the sentiment in a convincing manner, Mr. di Galoma said.

The 10-year Treasury yield has climbed from 2.353% on Friday, while the two-year yield has risen to 1.873% from 1.840%. The widening gap between the two yields has come as many traders have unwound bets that would benefit from a narrowing in the yield curve, as the difference is known.

The yield curve is often seen by many investors as a barometer of the health of the economy. The narrowing of the difference between two- and 10-year yields this year, from 1.25 percentage points in January, has led some investors to question whether the economy could be headed for a slowdown.

Write to Daniel Kruger at daniel.kruger@wsj.com

U.S. government bonds rose Thursday after the release of tepid economic data.

The yield on the benchmark 10-year U.S. Treasury note snapped a four-day streak of increases, falling to 2.483% from 2.497% Wednesday. Bond yields fall as prices rise.

Yields dipped after data showing jobless claims rose and the economy grew slower in the third quarter than first estimated.

Initial jobless claims, a proxy for layoffs across the U.S., rose by 20,000 to a seasonally adjusted 245,000 in the week ended Dec. 16, the Labor Department said Thursday. Economists surveyed by The Wall Street Journal expected 230,000 new claims last week. U.S. output grew at a 3.2% annual rate in the third quarter, according to a revised estimate by the Commerce Department released Thursday. The prior estimate was 3.3%.

With the weaker data, the recent impetus to sell "has kind of subsided," said Thomas di Galoma, head of Treasury trading at Seaport Global Holdings.

The 10-year yield this week reached its highest levels since March, as investors debated whether the run-up will endure or whether it is a byproduct of thin holiday trading, when many traders and investors are out of the office.

"One of the issues markets are having is there just aren't enough people out there" to ratify the sentiment in a convincing manner, Mr. di Galoma said.

The 10-year Treasury yield has climbed from 2.353% on Friday, while the two-year yield has risen to 1.877% from 1.840%. The widening gap between the two yields has come as many traders have unwound bets that would benefit from a narrowing in the yield curve, as the difference is known.

The yield curve is often seen by many investors as a barometer of the health of the economy. The narrowing of the difference between two- and 10-year yields this year has led some investors to question whether the economy could be headed for a slowdown.

Write to Daniel Kruger at daniel.kruger@wsj.com

(END) Dow Jones Newswires

December 21, 2017 16:47 ET (21:47 GMT)