Yields inch higher as investors look to US non-farm payrolls

05 Oct, 2017

"The market is looking forward to tomorrow's payrolls even though that number could be distorted by Hurricanes Harvey and Irma," said Justin Lederer, Treasury analyst at Cantor Fitzgerald in New York.

Wall Street economists expect just 90,000 new US jobs for September, down from 156,000 in August, according to a Reuters poll.

Long-dated short positions in Treasuries have been stretched and investors looked to square up ahead of a potentially volatile trading day on Friday because of the payrolls number, analysts said.

A JP Morgan client survey showed that net shorts on long-dated US Treasuries rose to a record high.

US 10-year note yields had risen about 20 basis points in September, while 30-year bond yields climbed 13 basis points, bolstered by an uptick in inflation and a more bullish economic outlook from the Federal Reserve.

In mid-morning trading, the benchmark 10-year US Treasury note yield was at 2.339 percent, up from 2.332 percent late on Wednesday, while the 30-year yield was at 2.881 percent, up from 2.877 percent.

US two-year note yields were up at 1.487 percent, from 1.479 percent on Wednesday.

Data on Thursday showed underlying strength in the US economy.

The number of Americans filing for unemployment benefits fell more than expected last week. Initial claims for state unemployment benefits dropped by 12,000 to a seasonally adjusted 260,000 for the week ended Sept. 30, the Labor Department said.

The US trade deficit also narrowed for the month of August to $42.4 billion, the smallest since September 2016.

US Treasuries, however, showed little reaction to the data.

 

Copyright Reuters, 2017
 

 

Read Comments