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U.S. Treasury yields retreated early Monday amid worries that Congressional infighting could endanger the prospect of additional fiscal stimulus measures after the expiration of jobs benefits this week.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 0.583% edged 0.8 basis point down to 0.581%, near the floor of its trading range established since April, while the 30-year bond yield TMUBMUSD30Y, 1.222% fell 2 basis points to 1.219%. The 2-year note rate TMUBMUSD02Y, 0.141% ticked 0.4 basis point lower to 0.145%.
What’s driving Treasurys?
The White House and Republicans are set to unveil a $1 trillion fiscal stimulus package on Monday, intended to support the economy after extended unemployment benefits expire later this week. Without additional fiscal support, investors worry a sudden drop in jobless benefits could halt the U.S.’s tentative recovery, already imperiled by the ever-increasing tally of COVID-19 cases in the U.S.
It remains unclear if Congress will manage to pass a stimulus bill this week as lawmakers remain divided over extending unemployment benefits, with Republicans worried such a move could discourage Americans from returning to work.
Investors also continued to contend with data showing the coronavirus was spreading rapidly across the country. The number of coronavirus infections in the U.S. climbed to 4.23 million, while deaths attributed to the disease rose to 146,935, according to data aggregated by Johns Hopkins University.
On the economic front, orders for durable goods, those meant to last at least three years, rose strongly in June for the second straight month after historic declines in the early spring. Orders climbed 7.3% last month, the government said Monday. Wall Street economists had expected a 7% increase.
What did market participants’ say?
“With COVID cases seemingly out of control in the United States and temporary job and economic support measures due to expire in many countries over the coming months, it seems as though the markets that were so confident their glass half full view of the world view was going to last, are perhaps quietly preparing for a rainy day,” said Rabobank analysts.
