U.S. Treasury yields added to their ascent on Friday ahead of the monthly U.S. employment report, as investors sold bonds on the expectation that the economy’s gradual reopening is on track.
What are Treasurys doing?
The 10-year Treasury note yield
TMUBMUSD10Y,
climbed 5.7 basis points to 0.877%, around its highs since March 19, while the 2-year note rate
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was up 1.2 basis points to 0.206%. The 30-year bond yield
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surged 7.3 basis points to 1.699%.
What’s driving Treasurys?
The bond-market is gearing up for its last test of the week, with the U.S. Labor Department’s monthly employment report for May due for release at 8:30 a.m. ET. Investors say it will likely underscore the continued pain in the labor-market as MarketWatch-polled economists forecast the U.S. economy to shed 7.25 million jobs in May, albeit down from a record 20.5 million in the previous month.
The unemployment rate is expected to surge to 19%, while average hourly earnings rose 1.5% in May.
Regardless, investors are already looking past the current economic devastation and starting to anticipate how the U.S. will recover as the reopening efforts gain traction. As haven flows dwindle, prices for longer-dated government paper have come under pressure, sending their yields higher.
Global equity markets were rallying on Friday. Futures for the S&P 500
ES00,
and
YM00,
indicated a higher open for Wall Street. Meanwhile in Europe, the Stoxx Europe 600 index
SXXP,
was gaining 1.2%.
What did market participants’ say?
“The May payroll report is an obvious focus today but we know we have to look at what the economy looks like after the reopenings are mostly complete outside of large gatherings like sporting events with fans and concerts,” said Peter Boockvar, chief investment officer at the Bleakley Advisory Group.
Source : MTV
