On the face of it, Thursday’s massive rally in U.S. Treasuries seems to make no sense. After all, the economic data was nothing short of spectacular. All at once, bond traders were hit with the following indicators:
Within 15 minutes, the benchmark 10-year Treasury yield dipped two basis points to 1.59%, touching what seemed like a resistance level from late March. But it just kept going, dropping as much as eight basis points on the day to 1.55%, the lowest since March 11. The 30-year bond yield tumbled as much as 10 basis points to 2.21%, marking a full 30-basis-point retreat from its intraday high a month ago.