10-year Treasury yield falls slightly after big jump in jobless claims

The benchmark 10-year Treasury yield fell slightly Thursday as investors weighed another jump in jobless claims as well as new Federal Reserve measures to backstop the reeling U.S. economy amid the coronavirus crisis.

The yield on the benchmark 10-year Treasury note, which moves inversely to price, was marginally lower at around 0.75% while the yield on the 30-year Treasury bond rose slightly to 1.37%.

The Labor Department said Thursday 6.6 million Americans filing first-time unemployment claims in the week ended April 4 as the economic toll of the coronavirus pandemic becomes more apparent. That brings the total over the past three weeks to more than 16 million.

“We came into this release assuming it was less about the absolute level of initial claims and more about the trajectory; so on the margin, the fact this morning’s print wasn’t a record high is encouraging,” Ian Lyngen, BMO’s head of U.S. rates, said in a note Thursday.

Meanwhile, the Fed on Thursday released long-awaited details regarding its Main Street business lending program and several other initiatives that total up to $2.3 trillion. 

Under provisions outlined for the first time, the loans would be geared toward businesses with up to 10,000 employees and $2.5 billion in revenues for 2019.

“The muted cross-asset reaction is consistent with much of this policy evolution having been expected and already priced in,” Lyngen said.

Market focus also remains attuned to hopes of a peak to the rate of infection, though New York state, America’s epicenter, set another single-day record for deaths on Wednesday. More than 432,000 cases have been confirmed nationwide as of Thursday morning, resulting in more than 14,800 deaths.

Meanwhile, a bid to push through a further $250 billion of small business aid has stalled in Congress as Democrats insisted that it be coupled with a similar package for hospitals and local governments in order to tackle the crisis.

Auctions will be held Thursday for $90 billion of 4-week Treasury bills and $70 billion of 8-week bills.

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