April trade data, initial jobless claims
The U.S. Treasury yields showed signs of stability on Thursday following significant declines seen on Wednesday due to a series of disappointing U.S. data releases.
The 2-year yield edged up by less than 1 basis point to 3.885% at 3:26 a.m. EST, while the 10-year Treasury yield also saw a minor increase of less than 1 basis point to 4.371%. Meanwhile, the 30-year long bond yield remained unchanged at 4.89%.
Investors are closely monitoring the April trade data and the latest initial jobless claims report set to be released later in the day. Weak economic indicators in the previous session led to a sharp drop in Treasury yields, with the 10-year bond yield declining by over 10 basis points on Wednesday.
The services sector activity unexpectedly weakened in May, dropping to 49.9%, just below the expansion-contraction threshold and missing the Dow Jones forecast of 52.1%. Additionally, private sector payrolls only increased by 37,000 in May, well below the Dow Jones estimate of 110,000. This disappointing data raised concerns among investors about a deteriorating labor market and its potential impact on the economy.
Despite the forecast misses, Deutsche Bank noted in a research report that the latest figures are not alarming enough to reignite fears of a recession in the U.S.
Looking ahead, traders will also be focused on the release of May’s non-farm payrolls and unemployment rate report on Friday.
