BOND REPORT: Treasurys Rally After Soft China Data Increases Global Growth Concerns
15 December 2018 - 12:34AM
Dow Jones News
By Sunny Oh
Futures for S&P and Dow point to lower open
Treasury prices rose Friday, pulling down yields, after softer
economic data in China perked up concerns around the global
economy's health, drawing investors into haven assets like U.S.
government debt.
The 10-year Treasury note yield slipped 3.1 basis points to
2.880%. The 2-year note yield was down 2.9 basis points to 2.731%,
while the 30-year bond fell 2 basis points to 3.142%. Bond prices
move in the opposite direction of yields.
Growth in China's industrial output and retail sales came in
weaker than expected, stoking fears that pockets of weakness were
cropping up in the world's second-largest economy. Industrial
output in November grew 5.4% on a yearly basis, below the consensus
forecast of 5.9%. Retail sales rose 8.1% in November, its slowest
pace since 2003 and 0.7 percentage point below consensus
expectations, according to FactSet data.
Asian stocks slumped on the heels of the lackluster data,
drawing investors into government paper. The Nikkei 225 and the
Shanghai Composite ended down more than 1%. Futures for the Dow
Jones Industrial Average and S&P showed U.S. equities were
poised for a lower open.
"While tariffs only exacerbate the softness, the pace of
economic growth in China has been slowing irrespective of them in
response to a needed slowing of excessive credit growth," said
Peter Boockvar, chief investment officer for the Bleakley Advisory
Group, in a note.
The U.S. and China remain engaged in trade talks that some hope
will lead to the end of the tit-for-tat tariffs between the two
sides. But some analysts say that to arrest China's slowdown,
Beijing needs to launch a fresh batch of fiscal stimulus measures
that could undo efforts to prevent a further buildup of debt across
its economy.
(END) Dow Jones Newswires
December 14, 2018 08:19 ET (13:19 GMT)
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