U.S. Treasury yields came in higher early Friday, with the Treasury’s 10-year note headed for the strongest yield hike in about six weeks, as debt prices came under pressure over concerns about pent-up inflation, even as recent employment data has struggled to support fears. de reflation.
What do Treasurys do?
Yield of 10-year financial note TMUBMUSD10Y,
2.7 base points rose to 1.314%, the highest level since February last year, and the 2-year TMUBMUSD02Y note rate,
it was flat at 0.111%. Yield 30-year bonds TMUBMUSD30Y,
gained 2.2 basis points to 2.098%.
For the week, the 10-year Treasury led the steepest weekly yield hike, around 10 basis points, from around Jan. 8, according to Dow Jones Market Data.
What drives Treasurys?
Government debt markets were renewing their selling efforts as investors remained concerned about the potential for inflation when and if Washington passes a new pandemic relief bill that could inject more than a trillion dollars into the U.S. economy , which may reinforce potential savings from the onset of immunization. Spreading out includes an ever-growing segment of Americans.
But labor market data, particularly a recent jobless claims report, revealing small earnings gains last month and a high rate of layoffs, have saved some bonds ’commitment.
On Thursday, Finance Secretary Janet Yellen said a major fiscal relief package was needed to counter an economic blow from the pandemic, protecting the $ 1.9 trillion price tag proposed by the Biden administration for aid.
Meanwhile, the U.S. economic calendar was scarce on Friday, with only home sales for January and purchase manager reviews of both the services and the manufacturing sector later in the morning.
What did market participants say?
“Without clear guidance from today’s data and softer risk asset trading the higher trend in bond yields could lose further steam,” wrote Padhraic Garvey, head of regional research for America at ING.