Bond Report: Treasury yields edge higher as investors eye data, debt auction

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U.S. Treasury yields were slightly higher on early Thursday’s trade before a raft of economic data and a key bond auction in the afternoon.

What are Treasurys doing?

The 10-year Treasury note yield TMUBMUSD10Y, 0.713% was up 0.7 basis point to 0.71%, while the 30-year bond yield TMUBMUSD30Y, 1.481% gained 1.4 basis points to 1.474%. The 2-year note rate TMUBMUSD02Y, 0.148% edged 0.6 basis point higher to 0.151%. Bond prices move inversely to yields.

What’s driving Treasurys?

Analysts will dig into data on the U.S. labor market and price pressures. Initial jobless benefit claims for the latest weekly period ending in Sept. 5 and August producer prices are due at 8:30 a.m. ET. MarketWatch-polled analysts forecast new applications for unemployment benefits will fall to 840,000, from a previous 881,000.

The U.S. Treasury Department will sell the last of its three auctions on Thursday afternoon, putting up $23 billion of 30-year bonds on the block. The previous two auctions attracted little interest.

As expected, the European Central Bank kept its key interest rates unchanged and the size of its monthly net asset purchases at €20 billion. Investors will now turn their eyes to ECB President Christine Lagarde’s press conference.

The 10-year German government bond yield TMBMKDE-10Y, -0.432%, a proxy for the eurozone debt market, is up 2 basis points to negative 0.443%.

What did market participants’ say

“Although yesterday’s 10-year auction came with a slight ‘tail/concession’, absolute rate levels are decent within the context of the recent range,” said Gregory Faranello, head of U.S. rates at AmeriVet Securities, referring to market participants’ term for a poor showing in a debt auction.

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