Yields lower on weak Chinese data, Afghan and COVID concerns
U.S. Treasury yields fell on Monday as weak Chinese economic data and concerns about the Taliban victory in Afghanistan and new COVID variants increased demand for the safe-haven bonds.
China's factory output and retail sales growth slowed sharply and missed expectations in July, while concerns about global risks grew after Taliban insurgents seized the Afghan capital Kabul and declared the war against foreign and local forces over.
Benchmark 10-year yields fell four basis points to 1.256%, after earlier getting as low as 1.223%. The yield curve between two-year and 10-year notes flattened two basis points to 105 basis points.
Investors are also focused on minutes from the Federal Reserve’s July meeting due on Wednesday, which will be scoured for any new insight into when the U.S. central bank is likely to begin paring bond purchases.
Fed Chair Jerome Powell told reporters after the meeting that he wants to see “strong job numbers” in the coming months before tapering purchases.
U.S. dollar, yen rise after soft China data, amid Afghan unrest
Against a basket of six major currencies, the dollar was up 0.1% at 92.620, after falling to a one-week low of 92.468 on Friday. Its gains were most pronounced against commodity currencies.
Currency market volatility, even by its already low levels, is nearing 2021 lows thanks to the summer lull.
In cryptocurrencies, bitcoin fell 1.2% to $46,479 after hitting a three-month high of $48,190 over the weekend.
Reference: CNBC, Reuters
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