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US Treasury yields fall as investors track Middle East tensions, await US jobless claims data
US Treasury yields fall as investors track Middle East tensions, rising oil prices and US jobless claims data for clues about the economy and interest rates.
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US Treasury yields fell on Thursday as investors kept a close watch on rising tensions in the Middle East and waited for fresh US jobless claims data due later in the day. The decline in Treasury yields also came amid a broader move away from riskier assets in stock markets.
The 10-year US Treasury yield dropped by more than 7 basis points to 5.0732%. The 10-year Treasury yield is an important benchmark for borrowing costs in the US, including mortgage rates, auto loans and credit card debt, according to CNBC.
US Treasury yields fall across maturities
The 2-year US Treasury yield also moved lower. It fell by more than 5 basis points to 4.7654%. This yield is closely linked to investor expectations for short-term interest rate decisions by the Federal Reserve, the US central bank.
The 30-year US Treasury yield declined by 6 basis points to 5.3751%. Longer-term Treasury yields can also react to geopolitical developments and changes in investor sentiment, according to CNBC.
Other US Treasury yields also recorded declines. Market data listed the 10-year yield at 5.048%, down 0.098 percentage points, while the 2-year yield stood at 4.736%, down 0.087 percentage points. The 30-year yield was at 5.359%, down 0.078 percentage points.
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Yields on shorter-term Treasury securities also fell. The one-month Treasury yield stood at 3.98%, down 0.003 percentage points. The three-month yield fell to 4.156%, down 0.013 percentage points, while the six-month yield declined to 4.34%, down 0.027 percentage points. The one-year Treasury yield dropped to 4.458%, down 0.041 percentage points, according to the market data provided by CNBC.
US jobless claims data in focus
Investors are waiting for US initial jobless claims data. The US Labor Department is scheduled to release the figures later on Thursday. The report will show how many people filed for unemployment benefits for the first time, giving investors another indication of the health of the US labour market.
Economists expect 200,000 Americans to have filed initial jobless claims. The estimate, based on a Dow Jones poll of economists, is for the week ended October 17. Investors will assess the figures for clues about labour market conditions and the possible direction of US interest rates, according to CNBC.
Middle East tensions weigh on market sentiment
Rising Middle East tensions have also put pressure on market sentiment. Treasury yields fell as investors adopted a more cautious approach amid geopolitical uncertainty and weakness in stock markets.
Investors are monitoring developments in the Middle East alongside incoming US economic data. The combination of geopolitical risks, rising oil prices and uncertainty about the labour market is shaping market sentiment as investors assess the outlook for the US economy and interest rates, according to CNBC.
Oil prices rise amid Iran strike concerns
Oil prices climbed sharply as concerns about a possible escalation in the Middle East grew. West Texas Intermediate (WTI) crude futures rose 2.81% to $99.96 a barrel in early trading on Thursday, moving closer to the $100 mark.
Brent crude, the global oil price benchmark, also rose. Prices increased 3.33% to $112.44 a barrel on Thursday.
The rise in oil prices followed a report about possible renewed US-Israeli strikes on Iran. The New York Times reported on Wednesday, citing unnamed US officials, that the US and Israel were considering restarting strikes on Iran in a “short but intensive” operation after next month's US midterm elections.
What falling Treasury yields mean
A basis point is one-hundredth of a percentage point. One basis point equals 0.01 percentage points. Treasury yields and bond prices move in opposite directions, meaning bond prices generally rise when yields fall and decline when yields rise.
