US Treasury yield falls due to weak economic data and rise in coronavirus cases

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Leek Karen Pierog

CHICAGO, Oct 13 (Reuters) – The yield on U.S. Treasuries slipped Tuesday on weak economic data and a surge in COVID-19 cases globally, raising concerns about potential weakness ahead.

* The return of the 10-year reference notes was down 4.3 basis points, at 0.7322%.

* Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research in New York, pointed to “a lot of loose data coming from Europe,” in addition to the latest consumer price data in the United States, to explain the decline when the market returned to operation after the holiday on Monday.

* Yields extended their decline after a Labor Department report that showed consumer prices rose for the fourth consecutive month in September, but at a slower pace amid considerable weakness in the economy.

* Jones said the increase in COVID-19 outbreaks in the United States and other countries is seen as a limitation of economic activity.

* The two-year bond yield, which tends to move in line with interest rate expectations, was down one basis point, at 0.143%.

* A closely watched part of the bond yield curve, which measures the gap between the return on two-year and 10-year notes, viewed as an indicator of economic expectations, was trading at 58.80 basis points, 3 points below Friday close.

(Edited in Spanish by Carlos Serrano)


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