The two-year US Treasury yield briefly touched a record low of 0.1049%. Benchmark 10-year yields eased slightly to 1.2771%, pulling away from the highest level since Feb. 27, 2020 as some investors judged that recent selling of fixed income had gone too far.
The benchmark 10-year yield was up 1.4 basis points at 1.1532% in morning trading after it reached as high as 1.188%, its highest since March 20, 2020.
US employment growth rebounded less than expected in January and job losses the prior month were deeper than initially thought.
The benchmark 10-year yield was last up 1.8 basis points at 1.1254%.
The fact they are staying flexible and not acting quickly on the idea of 'oh low rates are great, let's borrow while we can' should be a bigger positive for Treasuries over time.
The 10-year Treasury Inflation-Protected Securities' breakeven inflation rate, which briefly slipped below 2% last week, was last at 2.024%, indicating the market expects inflation to average more than 2% a year for the next decade, above the current pace of inflation.
Dow Jones Industrial Average rose 30.53 points, or 0.1%, to 30,990.53, the S&P 500 lost 1.52 points.
Europe's broad FTSEurofirst 300 index added 0.79%, at 1,575.88. The pan-European STOXX 600 was up 0.8% after Swiss wealth manager UBS posted a surge in quarterly net profit.
Treasury yields traded lower after a strong auction on Thursday of $15 billion in 10-year TIPS as investors sought protection on expectations of rising inflation.
A closely watched part of the yield curve measuring the gap between yields on two- and 10-year Treasury notes was last down 1.32 basis points at 96.93 basis points.
Retail sales dropped 0.7% last month, the Commerce Department said. Data for November was revised down to show sales declining 1.4% instead of 1.1% as previously reported.
This morning's disappointing retail sales figures reinforced the idea that more stimulus will be needed.
The market was primed for higher rates today for continued increase in yields today in anticipation of what Biden is going to say tonight, until we hit jobless claims.
Initial claims for state unemployment benefits increased 181,000 to a seasonally adjusted 965,000 for the week ended Jan. 9, the highest since late August.