NEW YORK (MarketWatch) — Treasury prices climbed Thursday, on track to push yields lower for the first session in six, as investors reacted to an expansion of American air strikes in the Middle East.
The 10-year note 10_YEAR, -1.34% yield, a borrowing benchmark that falls as prices rise, was down 2 basis points on the day at 2.516%.
President Barack Obama said late Wednesday he is authorizing airstrikes in Syria and expanding efforts to destroy Islamic militants in Iraq. The prospect of growing warfare prompted demand for Treasurys, which tend to see increased buying during times of geopolitical uncertainty. Global conflict in Iraq, Ukraine, and Gaza, have helped hold yields lower in recent months.
Treasury prices got an additional push higher after weekly jobless claims showed that 11,000 more people applied for unemployment benefits last week than during the week before, bringing the total to 315,000. Economists polled by MarketWatch expected claims of 301,000.
The 30-year bond 30_YEAR, -0.95% yield fell 2.5 basis points to 3.245%, while the 5-year note 5_YEAR, -1.90% yield fell 2.5 basis points to 1.757%.
Prices had been falling and yields rising during the past two weeks as investors fretted about next week’s Federal Reserve policy meeting, where the central bank could change the language it uses to describe the timing of rate hikes. Traders largely expect the central bank to lift its key lending rates for the first time in the middle of next year.
Investors will also turn their attention to an auction of $13 billion worth of 30-year bonds at 1 p.m. Eastern. It marks the third and final auction of the week.
Strategists at Nomura Securities wrote: “We think the underlying need to own long duration assets remains intact on a global basis and that should continue to help 30yr UST.”
