Traders steepened the US Treasury yield curve on Thursday as stock markets opened higher on optimism about the public-health impact of the Omicron coronavirus variant.
The benchmark 10-year yield was up 3.3 basis point at 1.4909% in morning trading, with Treasury markets set to close early ahead of the holiday weekend.
James Barnes, head of fixed income for Bryn Mawr Trust, said the rise seemed tied to early gains on Wall Street's main indexes, after data suggested the Omicron variant of the coronavirus was less severe than feared. US regulators also authorized Merck & Co's antiviral pill.
Expectations about inflation won't likely change much until there is more guidance from the US Federal Reserve next month, Barnes added. Until then, he said, "It seems like the bond market is taking direction from developments on Omicron."
Earlier in the day investors bid up bond prices after US weekly jobless claims held steady below pre-pandemic levels.
A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations was at 81 basis points, about two basis points higher than Wednesday's close.
The two-year US Treasury yield, which typically moves in step with interest rate expectations, was up 1.4 basis points at 0.6812%.
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