Yahoo Movies TREASURIES-U.S. yields climbs after claims data, payrolls eyed
By Chuck Mikolajczak
NEW YORK, Oct 6 (Reuters) - The yield on the benchmark U.S. 10-year Treasury rose on Thursday after a reading on the labor market showed unemployment benefit claims rose by the most in four months last week ahead of the monthly payrolls report.
Yields briefly moved lower after the data that said initial jobless claims rose by 29,000 to a seasonally adjusted 219,000 versus expectations of economists polled by Reuters for 203,000 applications.
Treasury yields have been sensitive this week to any signs the labor market might be slowing in hopes it would give the U.S. Federal Reserve room to pivot to a less hawkish policy stance and slow its rate of interest rate hikes after three straight increases of 75 basis points (bps).
"It doesn’t change the narrative but we’re probably in sit-and-wait mode until tomorrow morning until the employment report comes out," said Christopher Lanouette, managing director and fixed income manager of taxable and tax-exempt bond portfolios at CIBC Private Wealth.
"The overall macro narrative really hasn’t changed, at least enough to alter what the Fed is going to do, so this tug of war between the market trying to parse the data and thinking that any time of weak indicator is going to cause the Fed to pivot is probably premature."
The yield on 10-year Treasury notes was up 7.3 basis points to 3.832%.
Fed officials have been consistent in recent comments that the central bank will take aggressive measures in hiking interest rates to combat rising inflation, raising concerns among investors it could tilt the economy into a recession.
On Thursday, Minneapolis Federal Reserve Bank President Neel Kashkari said the Fed has "more work to do" on bringing down inflation, and is "quite a ways away" from being able to pause its aggressive interest-rate hikes.
The yield on the 30-year Treasury bond was
up 3.9 basis points
to
3.804
%.
A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a negative 38.4 basis points up from the negative 57.85 hit on September 22.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 6.4 basis points at 4.214%.
The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) was last at 2.349%, after closing at 2.319% on Wednesday.
The 10-year TIPS breakeven rate was last at 2.225%, indicating the market sees inflation averaging 2.22% a year for the next decade. (Reporting by Chuck Mikolajczak; editing by Jonathan Oatis)
