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Treasury yields moved mostly higher Friday morning, led by short-dated maturities, as investors prepared for the October jobs report.
What are yields doing?
-
The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.530%
edged up to 1.527%, compared with 1.524% at 3 p.m. Eastern on Thursday. Yields and debt prices move in opposite directions. -
The 2-year Treasury yield
TMUBMUSD02Y,
0.442%
was 0.439%, compared with 0.415% on Thursday afternoon, when the rate saw its largest one-day fall since March 23, 2020. -
The 30-year Treasury bond yield
TMUBMUSD30Y,
1.957%
edged down to 1.958%. It ended at 1.963% late Thursday.
What’s driving the market?
Investors are focused on jobs data after the Federal Reserve on Wednesday delivered a widely expected plan to begin tapering asset purchases this month, while Chairman Jerome Powell said the central bank could remain “patient” about rising interest rates.
Economists surveyed by The Wall Street Journal expect the data to show the U.S. economy created 450,000 new jobs in October, up from a preliminary 194,000 gain in September — the weakest reading of 2021. Jobs data is due at 8:30 a.m. Eastern.
Powell, who pushed back against rising market expectations for multiple 2022 rate increases beginning at midyear, he said it was possible the jobs market could improve sufficiently to warrant rate liftoff by the second half of next year.
Investors will also be keeping close watch on the jobs data for clues to inflation pressures. A failure to boost the labor market participation rate could stoke worries about persistent inflation.
Yields have fallen across the curve this week, with short-dated rates leading the way lower. That move was accelerated Thursday across bond markets after the Bank of England defied widely held expectations for a rate increase. The Treasury yield curve had flattened significantly coming into this week, driven by rising yields at the short end, as investors priced in a more aggressive Fed.
What are analysts saying?
“As yields pull back, there is now an increased risk of a reversal should today’s jobs numbers out of the U.S. beat the consensus estimates. After two back-to-back disappointing reports, U.S. jobs growth is expected to have picked up a gear,” said Raffi Boyadjian, lead investment analyst at XM, in a note.
