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Bond Report: Treasury yields hold ground after back-to-back climb ahead of employment report

Treasury yields are marginally higher on Friday as investors gear up for the official employment report, which could show if the tight labor market is leading to increased wage pressures. Read More...

Treasury yields were struggling for direction on Friday as investors awaited the official employment report, which could show if the tight labor market is leading to increased wage pressures.

What are Treasurys doing?

The 10-year Treasury note yield TMUBMUSD10Y, +0.64%   was virtually unchanged at 2.555%, after rising for two straight sessions. The 2-year note yield TMUBMUSD02Y, +0.88%   was up 0.6 basis point to 2.351%, while the 30-year bond yield TMUBMUSD30Y, +0.29%   was mostly unchanged at 2.941%. Bond prices move in the opposite direction of yields.

What’s driving the Treasurys market?

The Bureau of Labor Statistics will release the employment report at 8:30 a.m. Eastern time. The U.S. economy is expected to add 213,000 jobs in April, from 196,000 in March. Analysts also project the unemployment rate to fall to 3.7%, and for average hourly earnings to rise 0.2%.

Investors are still waiting for a multidecade low in the unemployment rate to produce wage increases. So far, a lack of inflationary pressures has kept the Federal Reserve on hold, though Fed Chairman Jerome Powell said he was confident inflation would eventually rebound back to the 2% target.

In other data, the Institute for Supply Management’s manufacturing index is set for release at 10 a.m. Eastern time.

See: The jobs report might be incredibly strong for an unusual reason

What else is on investors’ radar?

Fed officials will speak for the first time since Wednesday’ meeting, which could give further clarity on the central bank’s views on the inflation outlook. Chicago Fed President Charles Evans will give a speech at 10:15 a.m., followed by Fed Vice Chairman Richard Clarida at 11:30 a.m and New York Fed President John Williams at 1:45 p.m.

Later, St. Louis Fed President James Bullard, San Francisco Fed President Mary Daly, Dallas Fed President Robert Kaplan will appear together on a panel about monetary policy at 7:45 p.m.

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