Authorities bond yields rise amid combined financial information, optimism on Brexit deal
Government bond yields remained stable on Wednesday as investors digested a mix of economic data as well as signs of an impending Brexit trade deal between the UK and the European Union.
The yield on the benchmark 10 year Treasury note rose 3 basis points to 0.956%, while the yield on the 30 year Treasury note rose 4 basis points to 1.696%. Bond yields move inversely with prices.
Unemployment claims in the US were 803,000 for the week ended December 19, the Department of Labor said Wednesday. Economists polled by Dow Jones expected initial claims to rise to 888,000. However, personal income fell 1.1% in November, compared to an estimate of 0.3% according to data from the Dow Jones.
The yield on 10-year government bonds peaked when Brexit negotiators were on the verge of a new trade deal between the UK and the European Union. A deal would avoid tariffs due to go into effect at the beginning of the year.
President Donald Trump proposed on Tuesday not to sign a lengthy coronavirus aid package. He poured cold water on the $ 900 billion Covid relief bill that Congress passed earlier this week. Calling the measure an inappropriate “disgrace”, he called on lawmakers to make a number of changes, including larger direct payments to individuals and families.
The current package includes an increase in unemployment benefits, more small business loans, an additional $ 600 in direct payment, and funding to streamline the critical distribution of Covid-19 vaccines. However, Trump was dissatisfied with the $ 600 direct payments and requested an increase to $ 2,000.
Investors were also upset this week by a new strain of coronavirus first identified in the UK. The variant is believed to be up to 70% more transmissible than previous strains.