U.S. Treasury yields traded higher on Thursday after the European Central Bank drew attention to its plans for its asset purchasing program at its latest policy update.
What are Treasurys doing?
The 10-year Treasury note yield
rose 1.8 basis points to 1.107%, while the 2-year note yield
fell 0.6 basis point to 0.123%. The 30-year bond yield
climbed 3.1 basis points to 1.872%.
What’s driving Treasurys?
The European Central Bank, as expected, made no changes to interest rates or its asset-buying program on Thursday. But the ECB’s suggestion that it may not use the full envelope of 1.85 trillion euros to buy assets depending on financial conditions, weighed on values for European government paper and U.S. Treasurys.
The 10-year German government bond yield
was up 3.1 basis points to negative 0.528%.
A slate of U.S. economic data in the morning gave a snapshot of the unemployment picture and housing market activity. Weekly jobless benefit claims fell 26,000 to 900,000, but remained at elevated levels.
Meanwhile, U.S. home builders broke ground on new homes at a seasonally-adjusted annual rate of 1.67 million in December, a 5.8% increase from the previous month.
An auction for 10-year Treasury inflation-protected securities pointed to robust demand for inflation protection.
What did market participants say?
” As expected, the ECB did not deliver a meaningful surprise today,” said Petr Krpata, a strategist at ING, but he noted it could be argued “the bias of the statement and of the press conference was towards a hawkish side.”