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Treasury yields rose Thursday as better-than-expected U.S. labor-market data and declining coronavirus cases and deaths augured well for further economic recovery this year, while the prospect of more fiscal stimulus from Congress underlined the potential for reflation.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 1.143% rose 1.1 basis to 1.140%, its highest closing level since mid-March.
The 2-year note rate TMUBMUSD02Y, 0.121% was flat at 0.117%, while the 30-year bond yield TMUBMUSD30Y, 1.934% climbed 2.2 basis points to 1.933%, highest since Feb. 20.
What’s driving Treasurys?
U.S. initial jobless claims fell by 33,000 to 779,000 at the end of January, and fell for the third straight week to the lowest level since Nov. 28. This extends the gradual decline in the claims numbers after it spiked in January when several states put in place lockdowns to fight against the pandemic’s resurgence.
The number of people already collecting state jobless benefits, meanwhile, fell by 193,000 to a seasonally adjusted 4.59 million.
The data comes ahead of the January employment report from the U.S. Labor Department due Friday, with analysts predicting a gain of 50,000 jobs, after the U.S. economy lost 140,000 jobs in December.
But analysts remained cautious noting that the number of Americans filing unemployment benefits remained elevated.
See: The U.S. likely added jobs in January, but here’s why an increase could be misleading
In the U.K., the Bank of England kept interest rates and its bond-buying program unchanged. The central bank also said it wanted to develop the capabilities to set a negative interest rate, even if it had no intention to do so in the future.
Though, the central bank remained downbeat on the U.K.’S economic outlook, they raised their inflation forecasts. This helped feed the growing belief among market participants that higher price pressures are percolating across the world.
The 10-year U.K. government bond yield TMBMKGB-10Y, 0.443% surged 7.2 basis points to 0.441%.
What did market participants say?
” The claims data has been volatile recently, but it appears that the spike in mid-January was both temporary and not as bad as initially thought,” said Thomas Simons, senior money market economist at Jefferies.
