Bond yields were little changed Friday ahead of two key reports on the U.S. economy, including pivotal payrolls data.
What’s happening
-
The yield on the 2-year Treasury
BX:TMUBMUSD02Y
was 4.87%, down 0.5 basis points. Yields move in the opposite direction to prices. -
The yield on the 10-year Treasury
BX:TMUBMUSD10Y
was 4.12%, up 0.5 basis points. -
The yield on the 30-year Treasury
BX:TMUBMUSD30Y
was 4.23%, up 1.3 basis points.
What’s driving markets
The longer end of the curve saw a rough August, with the yield on the 10-year Treasury rising 13 basis points in August and the 30-year yield climbing 19 basis points.
Friday will see the release of nonfarm payrolls data at 8:30 a.m. Eastern, with expectations that 170,000 jobs were created in August. That would be the weakest showing since Dec. 2020, a month that saw 268,000 jobs lost.
“Given the market reaction to the JOLTS report, I sense there would be a disproportionate response to softer-than-expected data. It feels like the bias in the market still favors trying to game the first 100bp [basis points] points of rate cuts rather than the last 25bp of hikes. Indeed, although we have remained optimistic on growth, there has been almost a grudging acknowledgement of even the possibility that it will pull the Fed into another rate hike,” said Tim Duy, chief U.S. economist at SGH Macro Advisors.
He added a wildcard could be the Institute for Supply Management manufacturing data, due at 10 a.m. Eastern. “While markets expect more of the same ho-hum data, a break above 50 would be psychologically important,” Duy said.
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