ANL 28.30 Decreased By ▼ -0.15 (-0.53%)
ASC 20.25 Increased By ▲ 0.56 (2.84%)
ASL 25.10 Increased By ▲ 0.65 (2.66%)
BOP 8.25 Increased By ▲ 0.08 (0.98%)
BYCO 10.14 Increased By ▲ 0.34 (3.47%)
FCCL 21.92 Increased By ▲ 0.04 (0.18%)
FFBL 26.75 Increased By ▲ 0.15 (0.56%)
FFL 20.10 Increased By ▲ 0.05 (0.25%)
FNEL 8.94 Increased By ▲ 0.55 (6.56%)
GGGL 26.25 Increased By ▲ 1.35 (5.42%)
GGL 42.62 Increased By ▲ 0.93 (2.23%)
HUMNL 7.20 Increased By ▲ 0.39 (5.73%)
JSCL 21.40 Increased By ▲ 0.80 (3.88%)
KAPCO 39.19 Increased By ▲ 0.19 (0.49%)
KEL 3.86 Increased By ▲ 0.04 (1.05%)
MDTL 3.54 Increased By ▲ 0.15 (4.42%)
MLCF 44.00 Increased By ▲ 0.95 (2.21%)
NETSOL 158.51 Increased By ▲ 9.21 (6.17%)
PACE 7.20 Increased By ▲ 0.08 (1.12%)
PAEL 32.80 Increased By ▲ 0.75 (2.34%)
PIBTL 11.04 Increased By ▲ 0.18 (1.66%)
POWER 9.11 Increased By ▲ 0.16 (1.79%)
PRL 22.95 Increased By ▲ 0.15 (0.66%)
PTC 11.83 Increased By ▲ 0.17 (1.46%)
SILK 1.76 Decreased By ▼ -0.01 (-0.56%)
SNGP 49.50 Decreased By ▼ -0.20 (-0.4%)
TELE 15.80 Increased By ▲ 0.30 (1.94%)
TRG 158.20 Increased By ▲ 3.77 (2.44%)
UNITY 40.00 No Change ▼ 0.00 (0%)
WTL 3.52 Increased By ▲ 0.05 (1.44%)
BR100 5,124 Increased By ▲ 81.21 (1.61%)
BR30 25,651 Increased By ▲ 435.8 (1.73%)
KSE100 47,453 Increased By ▲ 397.96 (0.85%)
KSE30 18,985 Increased By ▲ 148.18 (0.79%)

Coronavirus
VERY HIGH Source: covid.gov.pk
Pakistan Deaths
23,462
4024hr
Pakistan Cases
1,039,695
4,85824hr
8.61% positivity
Sindh
385,414
Punjab
357,735
Balochistan
30,502
Islamabad
88,093
KPK
144,848
Business & Finance

Last day of 2020 trading sees yields dip, curve flatten

  • Yields on long-dated Treasury bonds fell despite an unexpected drop in unemployment claims for a second straight week.
01 Jan 2021

NEW YORK: U.S. Treasury yields fell on Thursday, the last trading day of the year, pulling the yield curve flatter, as thin volume exaggerated market moves.

Yields on long-dated Treasury bonds fell despite an unexpected drop in unemployment claims for a second straight week.

The decline ran counter to recent trends higher in long-dated yields and a steepening in the Treasury curve on hopes that the distribution of a vaccine would help end the coronavirus pandemic, which has plunged the global economy into crisis and killed nearly 2 million people.

Though longer-dated yields have risen since the all-time lows hit in March, the 10-year yield ended 2020, down 100 basis points and the 30-year yield ended the year down 74 basis points.

The two-year yield, which has remained anchored since the Federal Reserve cut interest rates to near-zero, ended the year down 144 basis points.

The anchored two-year yield has allowed the yield curve - as measured by the spread between the two- and 10-year yields - to steepen by 44.8 basis points this year. The two-year yield is likely to remain near its current level of 0.123% until the Fed adjusts its interest-rate policy.

Yields at the long end of the curve could continue to rise - the general trend they have followed since a low in August - if economic data improves in the new year.

Initial claims for state unemployment benefits slid to a seasonally adjusted 787,000 for the week ended Dec. 26, from 806,000 in the prior week, the Labor Department said on Thursday.

"The weekly claims numbers left some hope for a positive non-farms payroll print in just over a week's time," said Bill O'Donnell, rates strategist at Citigroup.

The government will release its closely watched monthly jobs report on Jan. 8.

The benchmark 10-year yield on Thursday fell 1 basis point to 0.917%, pulling the spread between the two- and 10-year yields down to 79.2 basis points, the lowest in a week.

The yield on the 30-year bond was last down 1.6 basis points at 1.646%.

Though the drop in jobless claims is a positive sign for the U.S. economy, thin trading volume skewed the Treasury market's response to the data.

With few people in the office, an early shutter of the Treasury market Thursday and some international markets already closed ahead of the Friday New Year's holiday, yields were being directed by one-off trades rather than broader trends.

"Overnight Treasury volume was about 35% of average with some key markets shut," said O'Donnell.