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Treasury yields fall with coronavirus, Fed testimony; jobless claims in focus

U.S. government debt prices were higher Thursday morning following another tech-driven sell-off on Wall Street, while concerns for the global economic recovery amid mounting coronavirus cases continued to weigh on sentiment.

At around 2:10 a.m. ET, the yield on the benchmark 10-year Treasury note was lower at 0.6692% and the yield on the 30-year Treasury bond slid to 1.4077%. Yields move inversely to prices.

Wednesday saw another plunge for risk assets, with the Dow closing more than 500 points lower as tech stocks tumbled once again, with investors also spooked by uncertainty around the resurgence in coronavirus cases and prospects of further federal stimulus measures.

Federal Reserve policymakers on Wednesday vowed to keep interest rates near zero and retain an accommodative monetary policy stance for years in order to help reduce unemployment, but called for greater fiscal help from Congress.

U.S. business activity slowed in September, a survey showed Wednesday, with manufacturing gains offset by a reversal in the services sector as the recovery appears to be losing momentum at the end of the third quarter.

In other news, President Donald Trump has refused to commit to a peaceful transition of power if he loses the Nov. 3 election, instead suggesting that the election outcome could end up before the Supreme Court, placing further emphasis on his rush to replace the late Justice Ruth Bader Ginsburg with a conservative justice before the election.

Thursday’s focus will shift to the latest jobless claims report from the Labor Department, due at 8:30 a.m. ET, with economists polled by Reuters expecting new unemployment filings last week to come in at 840,000, down from 860,000 the previous week. Continuing claims are also expected to fall.

Fed Chairman Jerome Powell and Treasury Secretary Steven Mnuchin will resume testimony before Congress at 10 a.m. ET, while August’s new home sales figures are published at the same time.

Auctions will be held Wednesday for $30 billion of 4-week Treasury bills, $35 billion of 8-week bills and $50 billion of 7-year notes.

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