After showing a lack of direction over the past few sessions, treasuries moved sharply higher during the trading day on Wednesday.
Bond prices showed a strong move to the upside early in the session and remained firmly positive throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slumped 11.4 basis points to 0.638 percent.
The jump by treasuries came following the release of a batch of disappointing economic data, including a Commerce Department report showing a sharp decline in U.S. retail sales in the month of March.
The Commerce Department said retail sales plummeted by 8.7 percent in March after falling by a revised 0.4 percent in February.
Economists had expected retail sales to plunge by 8.0 percent compared to the 0.5 percent drop originally reported for the previous month.
Excluding a nosedive in sales by motor vehicle and parts dealers, retail sales still tumbled by 4.5 percent in March following a 0.4 percent decrease in February. Ex-auto sales were expected to slump by 4.8 percent.
A separate report from the New York Federal Reserve showed New York manufacturing activity contracted at the fastest rate on record in the month of April.
The New York Fed said its general business conditions index plummeted to a negative 78.2 in April from a negative 21.5 in March, with a negative reading indicating a contraction in regional manufacturing activity. The index was expected to slump to a negative 35.0.
With the much bigger than expected nosedive, the general business conditions index plunged to its lowest level in the history of the survey-by a wide margin.
The Federal Reserve also released a report showing the biggest monthly drop in U.S. industrial production in over seventy years in the month of March.
The report said industrial production plunged by 5.4 percent in March after rising by a downwardly revised 0.5 percent in February.
Economists had expected production to tumble by 4.0 percent compared to the 0.6 percent increase originally reported for the previous month.
The Fed said the bigger than expected nosedive in industrial production reflected the biggest monthly decrease since January of 1946.
Additionally, the National Association of Home Builders released a report showing a record monthly decline in homebuilder confidence in April.
The report said the NAHB/Wells Fargo Housing Market Index plummeted to 30 in April after slipping to 72 in March. Economists had expected the index to tumble to 55.
The steep drop reflected the largest single monthly change in the history of the index and marks the lowest builder confidence reading since June 2012.
Late in the trading day, the Fed's Beige Book noted U.S. economic activity has contracted sharply and abruptly across all regions as a result of the COVID-19 pandemic.
The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, noted the hardest hit industries included leisure and hospitality and retail due to social distancing measures and mandated closures.
Trading on Thursday may be impacted by reaction to another batch of U.S. economic data, including the Labor Department's report on weekly jobless claims.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2155341/
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