Treasury yields steady as traders weigh increased Russia-Ukraine tensions

Thursday’s rally in U.S. government debt faded as trading progressed, leaving yields little changed again, as market participants assessed media reports that Russia had fired missiles on Ukraine.

What’s happening

• The yield on the 2-year Treasury BX:TMUBMUSD02Y advanced 1.9 basis points to 4.325%, from 4.306% on Wednesday.
• The yield on the 10-year Treasury BX:TMUBMUSD10Y rose less than 1 basis point to 4.413% from 4.406% on Wednesday.
• The yield on the 30-year Treasury BX:TMUBMUSD30Y rose less than 1 basis point to 4.603%, from 4.592% on Wednesday.

What’s driving markets

The bond market’s modest rally earlier in the day was triggered by geopolitical developments: Russia launched a barrage of missiles at Ukraine, the first major retaliatory move in response to Kyiv’s own attack earlier this week, CBS News reported.

In U.S. data releases, initial jobless claims fell to the lowest level in seven months in a sign that businesses were holding on to workers. New claims dropped by 6,000 for the seven days that ended on Nov. 16 from a revised 219,000 in the prior week.

“Despite rumblings of layoffs in some pockets of the economy, there’s little evidence of a broad-based increase in job cuts. To the contrary, first-time claims for unemployment remain comfortably low and relatively rangebound,” said Jim Baird, chief investment officer for Plante Moran Financial Advisors in Michigan.

Separately, the Federal Reserve’s regional bank in Philadelphia said its gauge of regional business activity stumbled to negative 5.5 in November from 10.3 in the prior month, which is a sign of deteriorating conditions. Existing-home sales rose 3.4% in October to an annual rate of 3.96 million, but remained at a relatively low level. And the leading indicators of the U.S. economy fell in October largely because of higher jobless claims, fewer building permits, and a decline in manufacturing orders.