Wednesday, December 24, 2008

BOND REPORT: Treasurys Gain As Data Underscore Economic Weakness

By Deborah Levine

Treasury prices rose Wednesday, pushing yields down, after government reports on joblessness and consumer spending pointed to ongoing strains in the U.S. economy.

Two-year note yields (UST2YR) fell 3 basis points, or 0.03%, to 0.88%.

Ten-year note yields (UST10Y) were little changed at 2.18%.

Bond prices move inversely to their yields.

Initial claims for unemployment benefits rose 30,000 to a seasonally adjusted 586,000 in the week ended Dec. 20, marking the highest level seen for first-time claims since 1982.

A separate report showed a decline of 0.6% in consumer spending during November, though economists surveyed by MarketWatch had been looking for a drop of 0.7%. A measure of consumer inflation excluding energy and food prices was flat in November, as predicted.

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