Friday morning is welcomed with the lowering of U.S. Government debt prices, as observed by investors closely monitoring flash readings of purchasing manager’s index data. Monitoring will help gather further clues about how the economy is recovering in terms of its pacing, as lockdown continues to be eased in various states.
A flash reading of August manufacturing and services PMI are still set to be released, followed by the release of existing-home sales data for July. The yield on the benchmark 10-year Treasury note was seen to be higher at 0.6525% while the 30-year Treasury bond rose to 1.3871%, both of which move inversely to prices. There are also no Treasury auctions that will be held on Friday.
The positive news comes after Treasury yields fell on Thursday as the number of Americans filed for jobless benefits rose to over a million last week, as reported in the latest data released by the Labor Department.
According to economists, jobless claims have risen to 1.106 million, surpassing a consensus expectation conducted by Dow Jones, which set the number to be at 923,000. The fall has disappointed investors who had hoped for a slow but continued recovery of the U.S. employment market, ushering some traders toward safe-haven assets like U.S. debt.
It is still unclear how Washington lawmakers will react to the current situation as the two parties are still at odds over pandemic relief legislation. Democrats are pushing for the continuation of the additional $600 federal unemployment benefit while Republicans, although also favoring the extension of unemployment benefits, want the rate to be lowered.
Geopolitical issues remain an important topic for investors as tensions continue to rise between the U.S. and China and Russia. Secretary of State Mike Pompeo has warned the two countries not to hinder the implementation of U.N. sanctions on Iran.
On the other hand, President Donald Trump wants to prevent China from receiving proceeds from the Tiktok Sale, as revealed by White House economic advisor Larry Kudlow. On Thursday, however, China’s commerce ministry announced that talks about the trade deals between the U.S. and China would be underway once again in the coming days.
The dynamic situation of the various factors affecting the U.S. economy continues to change the rise and fall of stocks, as recovery from the effects of the lockdown continues to unfold.