Treasury yields tick higher after better manufacturing data

U.S. government debt yields rose Friday after reports on domestic manufacturing and consumer spending proved better than expected.


The yield on the benchmark 10-year Treasury note rose to 0.635% while the yield on the 30-year Treasury bond climbed to 1.29%. Yields rise as prices fall.

The uptick in yields Friday came after a print on U.S. manufacturing fell less than feared.

The ISM Manufacturing Index fell to 41.5, better than Wall Street estimates of 35 but down sharply from March's 49.1. The measure is a diffusion gauge, measuring the percentage of firms seeing expansion, so a reading below 50 indicates contraction.

While virtually every category showed sharp declines, the overall index was held higher by inventories, which showed a reading of 49.7, up 2.8 percentage points from the March reading, and an 11-point jump in supplier deliveries to 76.

First-time filings for unemployment insurance hit 3.84 million last week, again exceeding market expectations bringing the tally since the coronavirus pandemic took hold to 30.0 million. The jobless toll now accounts for 18.4% of the country's working-age population.

U.S. consumer spending dropped 7.5% in March compared with a year earlier, while personal incomes fell 2% over the month, data showed on Thursday.

Risk-off sentiment has also been driven by a threat from U.S. President Donald Trump late on Thursday to impose retaliatory tariffs on China over the coronavirus pandemic. President Trump suggested that the long-awaited trade agreement signed by the world's two largest economies in January was now of secondary importance.

Half of all U.S. states are now forging ahead with their own strategies for easing restrictions on restaurants, retail and other businesses shuttered by the crisis, despite warnings from health experts over a lack of wide-scale virus testing and other safeguards.

- CNBC's Yun Li and Jeff Cox contributed to this report.