Treasury Securities Prices Rise Amid Optimism on US-Japan Trade Talks

Strategic Insights -

Investors' optimism that the US and Japan could reach a trade agreement has boosted prices of Treasury securities, with the 30-year bond price rising to 9614/32 and its yield falling to 7.81 percent. The Commodity Research Bureau index of 21 commodity futures, a leading indicator of inflation, also fell, easing concerns about rising prices. Economic reports released yesterday, including a jump in personal incomes and consumer spending, were in line with market expectations.

Key Takeaways:

  • The price of the 30-year bond rose 11/32 to 9614/32, with its yield falling to 7.81 percent from 7.84 percent on Thursday.
  • The Commodity Research Bureau index of 21 commodity futures fell 0.82 point to 229.85, easing investor concern about rising prices.
  • Personal incomes rose four-tenths of 1 percent in August, compared with an increase of five-tenths of 1 percent in July.
  • Consumer spending jumped nine-tenths of 1 percent in August.
  • The Chicago purchasing managers' index for September indicated continued growth for that region's economy, but with the price component of the index declining significantly for the month.
  • The high vendor delivery time in the purchasing managers' report suggests developing bottlenecks that are potentially inflationary, analysts said.
  • Analysts are now hoping that the Fed will wait until November before hiking rates, giving the market a little relief until then.

Statistics:

  • The 30-year bond price rose 11/32 to 9614/32.
  • The 30-year bond yield fell to 7.81 percent from 7.84 percent on Thursday.
  • The Commodity Research Bureau index of 21 commodity futures fell 0.82 point to 229.85.
  • Personal incomes rose four-tenths of 1 percent in August.
  • Consumer spending jumped nine-tenths of 1 percent in August.
  • The Chicago purchasing managers' index for September was 54.5 points for employment, 65.9 for production, 66 for new orders, and 54.4 for the order backlog.
  • Vendor delivery time rose to 62.9, up 3.1 points from last month.

Sources:

  • Report by Meyers, Pollock, Robbins Inc., quoted in The New York Times