U.S. government debt prices were lower Wednesday morning to begin the third quarter, as investors awaited key manufacturing and employment data and monitored measures to combat the coronavirus pandemic.
At around 4:10 a.m. ET, the yield on the benchmark 10-year Treasury note was higher at 0.6824% and the yield on the 30-year Treasury bond climbed to 1.4437%. Yields move inversely to prices.
June’s ISM manufacturing PMI (purchasing managers’ index), employment, prices and new orders data is all due at 10 a.m. ET, and is expected to show a continued recovery last month for U.S. manufacturing activity and hiring.
Prior to that, ADP employment change figures for June are due at 8:15 a.m. ET, with economists polled by Dow Jones expecting an increase of 2.50 million after a 2.76 million decline in May. The final IHS Markit manufacturing PMI reading for the month is published at 9:45 a.m.
A survey Tuesday indicated a sharp uptick in U.S. consumer confidence in June, with the Conference Board consumer confidence index rising 12.2 points to 98.1 as businesses reopened. However, a recent surge in cases has cast doubt over the speed of a possible economic recovery.
In congressional testimony on Tuesday, Treasury Secretary Steven Mnuchin said he expects more government stimulus funding to be approved by the end of July, with up to $140 billion in small business loans potentially redirected to support restaurants, hotels and other industries most impacted by the coronavirus pandemic. Federal Reserve Chairman Jerome Powell emphasized that the outlook is “extraordinarily uncertain.”
The U.S. reported another record daily spike in new infections on Tuesday with more than 47,000, according to a Reuters tally, with California, Texas and Arizona all reporting record increases. Top White House infections disease expert Dr. Anthony Fauci warned in a congressional testimony on Tuesday that the rate of new infections could eventually surpass 100,000 per day at the current trajectory.
Auctions will be held Wednesday for $25 billion of 105-day Treasury bills and $30 billion of 154-day bills.