NEW YORK (MarketWatch) — U.S. Treasury prices followed European bonds higher on Wednesday as investors kicked off the first day of the new quarter.
The 10-year Treasury note 10_YEAR, -1.08% yield, which rises as prices fall, was down 5.5 basis points on the day at 2.454%, on track to close at its lowest level since the beginning of September. The benchmark yield broke through its 50-day moving average, helping extend the push lower.
“No one thinks UST yields will join in the EU rally – one obvious reason for the dollar’s continued run – but global developments can easily keep UST rate increases in check if this week’s data don’t break to the upside,” said Jim Vogel, a strategist at FTN Financial, in a research note.
Traders and strategists pointed to a number of reasons for the drop in yields:
German yields led the push lower ahead of the U.S. trading session, with the nation selling 10-year notes DE10YT, -3.72% at a yield below 1% for the first time ever. Dropping German yields make U.S. yields look more attractive, bringing in foreign buyers. The 10-year German yield dropped 3.5 basis points on the day to 0.914%.
A private payrolls report from Automatic Data Processing showed 213,000 new jobs were created in September, compared with expectations of a 209,000 gain.
U.S. Centers for Disease Control confirmed that a case of the Ebola virus was detected in Texas.
Also on the calendar for Wednesday will be a PMI manufacturing index report at 9:45 a.m. Eastern, and an ISM manufacturing index at 10 a.m.
The Labor Department will release its monthly jobs report on Friday. Economists polled by MarketWatch expect the U.S. to have added 220,00 new jobs in September, up form 142,000 in August.
The 30-year bond 30_YEAR, -0.88% yield dropped 4 basis points to 3.169% while the 5-year note 5_YEAR, -1.93% yield slipped 6 basis points to 1.722%.
