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U.S. Treasury yields rose in early Wednesday’s trade ahead of data releases that will reflect impact of efforts to reopen the economy on the manufacturing sector and labor-market.
What are Treasurys doing?
The 10-year note yield TMUBMUSD10Y, 0.694% rose to 0.679%, up from 0.653% on Tuesday. The two-year yield TMUBMUSD02Y, 0.176% was virtually unchanged at 0.149% The 30-year bond yield TMUBMUSD30Y, 1.450% gained 3.3 basis points to 1.443%.
For the second quarter, the two-year note fell 3.8 basis points, the 10-year note picked up 3.8 basis points, and the 30-year bond yield added 6.4 basis points.
What’s driving Treasurys?
Automatic Data Processing Inc.’s private-sector employment report for June is due at at 8:15 a.m. ET, ahead of the more widely-watched U.S. Labor Department jobs data on Thursday. MarketWatch-polled economists forecast the U.S. economy will have added 3.9 million jobs last month, after gaining 2.51 million jobs in May.
The bond-market will also pay close attention to the Institute of Supply Management’s manufacturing index for June at 10 a.m., with expectations for the factory gauge to rebound to a reading of 50.2. Any number above the 50 mark indicates an expansion in economic activity.
The minutes from the Federal Open Market Committee, the U.S. central bank’s rate-setting body, may show senior Fed officials holding further discussions on the potential for capping yields for certain maturities, otherwise known as yield-curve control.
Even as expectations for the policy’s adoption have gained ground, some like Dallas Fed President Robert Kaplan and St. Louis Fed President James Bullard have pushed back against yield-curve control.
What did market participants’ say?
“With less conviction underpinning global financial markets, interest rates can easily over react to any out-of-the-ordinary data this week,” wrote Jim Vogel, an interest-rate strategist at FHN Financial.
