Treasury Yields Fall After Weak Data Stokes Global Growth Worries
U.S. government debt pricesÂ rose on Monday as investors looked for safety after the release of weak European economic data stoked worries about the global economy.Â
The benchmark 10-year Treasury yield dropped more than 4 basis points to 1.7034% while the 2-year rate slid to 1.66%. Yields move inversely to prices.
U.S. MARKETS OVERVIEW: TREASURYS CHART
|US 3-MO||U.S. 3 Month Treasury||1.946||0.00||0.00|
|US 1-YR||U.S. 1 Year Treasury||1.80||-0.013||0.00|
|US 2-YR||U.S. 2 Year Treasury||1.646||-0.023||0.00|
|US 5-YR||U.S. 5 Year Treasury||1.544||-0.038||0.00|
|US 10-YR||U.S. 10 Year Treasury||1.668||-0.04||0.00|
|US 30-YR||U.S. 30 Year Treasury||2.118||-0.035||0.00|
German manufacturing activity dropped to itsÂ lowest level since the financial crisisÂ this month, according to data from IHS Markit. Germanyâ€™s services sector also grew at its slowest pace in nine months. Overall,Â manufacturing in the euro zoneÂ fell to a more than six-year low while services grew at is slowest pace in eight months, the data showed.
Yields in Europe also fell broadly. Germanyâ€™s 10-year rate slid more than 7 basis points to negative 0.582%. Franceâ€™s benchmark yield fell to negative 0.289%. Italyâ€™s 10-year note yield dropped 9 basis points to 0.828%.
â€œThese are not good numbers and they do not imply global economic stabilization is occurring,â€ said Tom Essaye, founder of The Sevens Report, in a note.Â
U.S. manufacturing activityÂ rebounded to a five-month high, IHS Markit said, but the firm notedÂ the data was till near three-year lows. â€œProspects also look gloomy, with inflows of new business down to the lowest since 2009.â€
Investors also kept an eye on U.S.-China trade developments.Â The U.S. and China described over the weekend last weekâ€™s deputy-level trade talks as â€œconstructive.â€
Octoberâ€™s high-level trade talks remain on track, but a breakthrough appeared unlikely after PresidentÂ Donald TrumpÂ told reporters on Friday that he was â€œnot lookingâ€ for a partial deal and Chinese officials canceled goodwill visits to U.S. farmers.
â€œWhen you look at the world as we know it right now, the risks out there still remain,â€ said Gregory Faranello, head of U.S. rates at AmeriVet Securities, in a note. â€œFlexibility will be the key in the coming weeks. And in the end, the biggest driver going forward will be trade.â€
By: Fred Imbert