A powerful rally in Treasury bonds has stalled out, with yields extending their weeklong climb on Friday ahead of an important nonfarm-payrolls report that will give investors clues on whether the labor market has continued to shrug off U.S.-China trade tensions.
Comments from Federal Reserve Powell, slated for later in the session in Zurich, also could provide a spark for assets on Wall Street.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, +1.91% was up 3.3 basis points to 1.598%, a day after the yield for the benchmark bond maturity logged its biggest daily rise since November 2016.
The 2-year note rate TMUBMUSD02Y, +1.59% was up 2.4 basis points to 1.566%, a day after it staged its biggest daily climb since February 2015, while the 30-year bond yield TMUBMUSD30Y, +0.89% climbed 2.8 basis points to 2.082%.
Bond prices move in the opposite direction of yields.
For the week, the 10-year Treasury has added 10 basis points, while the 2-year Treasury has climbed 6 basis points, and the long-dated 30-year bond has gained 11.7 basis points since last Friday.
What’s driving Treasurys?
Investors will closely eye the jobs report after a batch of better-than-expected data from private-sector employers and the services industry assuaged some fears that the U.S. economy was on the brink of slipping into recession.
The nonfarm payrolls data is set for release at 8:30 a.m. Eastern.
See: Thursday’s bond-market selloff will face stiff test on Friday in form of jobs report
Check out: U.S. likely added 173,000 jobs in August, but watch out for an end-of-summer surprise
Analysts polled by MarketWatch expect the U.S. to add 170,000 jobs in August, up from 164,000 in the previous month. The consensus estimate is for the unemployment rate to stay at 3.7%, and average hourly earnings to rise by 0.3%.
Later, Fed Chairman Jerome Powell will speak at 12:30 a.m. His comments could confirm market expectations for the U.S. central bank to cut rates by a quarter of a percentage point at the conclusion of its two-day policy meeting on Sept. 18.
Earlier in the week, senior Fed officials debated the need for an extended easing cycle given the U.S. economy’s resilience to the uncertainty of the trade war. A media blackout period, before the central bank’s decision, starts next week for Fed officials.
Read: Powell will get the last word on interest rates after Friday’s job report
What else is on investors’ radar?
In Asia, the People’s Bank of China announced it would cut the level that banks are required to hold as bank reserves in proportion to deposits by half a percentage point in a bid to boost lending.
Bank of Japan Gov. Haruhiko Kuroda said long-end rates had fallen too far. His remarks sparked selling Japanese government bonds with extended maturities.
The 30-year Japanese government bond yield TMBMKJP-30Y, +50.96% climbed 7.1 basis points to 0.207%.
Add Comment