U.S. government debt prices posted solid gains on Thursday.
The yield on the benchmark 10-year Treasury note was sharply lower at around 3.155 percent at 5:25 a.m. ET, while the yield on the 30-year Treasury bond was in the red at 3.335 percent. Bond yields move inversely to prices.
Equity markets around the world slumped Thursday. Asia-Pacific stocks saw sharp declines by the region’s market close, while European shares tumbled in its morning trade. In the U.S., futures tanked following on from a sharp drop seen in the previous session where the Dow closed more than 800 points down.
Markets have been jittery as interest rates continue to climb. While Treasury yields inched lower on Wednesday, this comes after the benchmark 10-year Treasury yield clinched a fresh seven-year high and the 30-year bond yield reached a high not seen since 2014 during the course of Tuesday’s trade.
Concerns surrounding rising interest rates continue to keep investors on edge, as strong economic data fuel jitters on what this could mean for the future of U.S. monetary policy and therefore the economy. In the latest surrounding the topic, President Donald Trump criticized the Federal Reserve on Wednesday, saying that the U.S. central bank was “making a mistake” for continuing to increase interest rates.
“The problem I have is with the Fed. The Fed is going wild. I mean, I don’t know what their problem is that they are raising interest rates and it’s ridiculous,” Trump went on to say in a separate telephone interview with Fox host Shannon Bream. No speeches by the Fed are scheduled to take place Thursday.
In the economic sphere, the data that will be closely watched comes out at 8:30 a.m. ET – the consumer price index (CPI) figures. Depending on the outcome, this could alleviate or deteriorate market sentiment, as strong data have supported a rise in Treasury yields as of late. Elsewhere, jobless claims are due out at 8:30 a.m. ET, while the treasury budget is scheduled to be released at 2 p.m. ET.
On the auction front, the U.S. Treasury is set to auction $15 billion in 29-year and 10 month bonds. The size of two separate bills and one Treasury Inflation-Protected Securities (TIPS) will also be announced.
Elsewhere, investors will be bracing for any news out of the U.S. administration, as the midterm elections – due in November – draw closer.