NEW YORK: US Treasury yields fell to their lowest in more than two weeks on Thursday as investors positioned for a weaker-than-expected US government jobs report for April.
After minimal movement in morning trading, Treasury yields sank as investors digested weak initial jobless claims data and its potential impact on Friday's non-farm payrolls report.
The number of Americans filing for unemployment benefits rose by the most since February 2015, exceeding the expectations of economists polled by Reuters, and earlier this week data showed private employers in the United States added 156,000 jobs in April, the weakest gain in three years.
"Between those, it signals that the number we get tomorrow may be one of those that isn't on the consensus or close to where we've been recently," said Craig Bishop, lead strategist of US fixed income strategies at RBC Wealth management in Minneapolis.
"It would be a divergence from that month-over-month steady stream of increases."
A Reuters survey showed economists expect payrolls likely rose by 202,000 in April after increasing by 215,000 in March. The unemployment rate is expected to hold at 5 percent.
A number below that could signal that US job growth has slowed, halting one of the few consistently positive readings on the economy. That could indicate braking inflation and a slower path of rate increases from the Federal Reserve.
"The question for non-farm payrolls is the perennial one: how much will the report move the needle for the Fed?" said Aberdeen Asset Management investment manager Luke Bartholomew in London.
"The market has pretty much written off a June hike and is skeptical that the Fed will manage even one this year."
Investors see only a 13 percent chance that the Fed will raise the federal funds target rate at its June meeting, according to CME Group's FedWatch tool. Traders see a less-than-50-percent chance of a rate hike at every meeting until December.
A poor reading on April's job report could make those odds even longer, adding more downward pressure to Treasury yields.
Benchmark 10-year Treasuries rose 10/32 in price to yield 1.745 percent, the lowest since April 18.
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