The benchmark 10-year Treasury yield slid to a one-month low Thursday in a counterintuitive move that should be a positive for the stock market.
Treasury yields, which move opposite price, had been falling, but they picked up momentum after two early morning economic reports on Thursday. One was March retail sales, which jumped nearly 10%, and the other was weekly jobless claims, which fell to 576,000 — the lowest level since the early days of the pandemic.
Strategists said the bond market was beginning to price in a peak for economic growth, expected to be as much as 10% this quarter. It also was responding to news of possible Japanese buying in Treasurys, as well as some worry about Covid.
The 10-year yield fell as low as 1.53%, before coming back to 1.57%. A basis point is equal to 0.01 percentage points. The market watches 10-year Treasury closely because it influences mortgage rates and other consumer and business loans.
Rising geopolitical tensions may be helping demand for safe-haven U.S. bonds on Thursday.
Dollar steady as strong data offsets lower yields
The dollar index was little changed on the day on Thursday as investors balanced bullish data showing U.S. retail sales rose by the most in 10 months in March against a continued drop in U.S. Treasury yields.
Dollar strength was capped, however, as Treasury yields dropped to one-month lows, reducing the relative attractiveness of the U.S. currency.
The dollar index earlier on Thursday hit a one-month low of 91.487, before rebounding to 91.608, unchanged on the day.
The euro fell 0.04% to $1.1975. It reached a six-week high of $1.1994 earlier on Thursday.
The greenback fell 0.23% to 108.65 Japanese yen.
Reference: CNBC
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