Treasury yields retreat slightly with risk rally set to pause ahead of jobless claims

At around 2:30 a.m. ET, the yield on the benchmark 10-year Treasury note was lower at 0.7557% and the yield on the 30-year bond slid to 1.5469%. Yields move inversely to prices.

Wednesday’s strong gains on Wall Street saw the Dow notch a three-day winning streak and the S&P 500 a four-day positive run, with traders citing optimism over the reopening of the U.S. economy and an onslaught of government stimulus.

However, investors are also monitoring an array of downside risks, including nationwide mass protests against racial injustice, the continuing threat of the coronavirus pandemic and rising tensions between the U.S. and China.

Peaceful protests continued across major cities on Wednesday night but tensions appeared to ease after an upgrade of the murder charge for the police officer who knelt on the neck of George Floyd, an unarmed black man, for nearly nine minutes until his death. The three other officers at the scene have also been charged in connection with Floyd’s death.

Meanwhile, President Donald Trump’s administration on Wednesday banned Chinese passenger planes from flying into the U.S. from June 16, in a bid to strongarm Beijing into allowing U.S. airlines to resume flights into China.

In focus on Thursday will be the Department of Labor’s figures on last week’s new jobless claims, set for release at 8:30 a.m. ET. Though economists polled by Dow Jones expect yet another deceleration in the pace of claims, the consensus estimate anticipates a further 1.8 million Americans filed for insurance during the week ended May 30.

Since the beginning of the coronavirus pandemic, more than 41 million claims have been filed, though the previous week’s figures indicated that the number of continuing claims had fallen sharply.

Also scheduled for 8:30 a.m. ET is April’s balance of trade, import and export data and first-quarter unit labor costs and nonfarm productivity reading.

Auctions will be held Thursday for $80 billion of 4-week Treasury bills and $70 billion of 8-week bills.