Friday, March 31, 2023
HomeMarketTreasury yields mixed ahead of January jobs report

Treasury yields mixed ahead of January jobs report

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Short-term Treasury yields ticked higher, while longer-dated yields edged down Friday as investors awaited the January U.S. jobs report.

What yields are doing
  • The yield on the 2-year Treasury note
    rose 1.6 basis points to 4.10%.

  • The 10-year Treasury note yield
    ticked down 0.5 basis point to 3.394%.

  • The 30-year Treasury bond
    was off 1 basis point at 3.547%.

Market drivers

Yields have pulled back this week after the Federal Reserve, Bank of England and European Central Bank delivered another round of interest rate hikes but failed to dissuade investor expectations that an aggressive cycle of increases is nearing its end.

The focus Friday morning is on the January jobs report at 8:30 a.m. ET. The U.S. likely added 187,000 new jobs in January, compared with 223,000 in the final month of 2022, according to economists polled by The Wall Street Journal.

Markets will likely be most sensitive to the reading on average hourly earnings. Investors will also be paying heed to the Institute for Supply Management’s January service sector activity index. The ISM reading is due at 10 a.m.

Economists look for the ISM reading to rise to 50.6% from a December reading of 49.6%. A figure above 50% signals an expansion in activity.

What analysts say

“Expect a decent jobs report and softening wage pressures. The trajectory of jobs gains in the past year builds the case for a softish landing,” said Jeffrey Roach, chief economist for LPL Financial, in a note.

“However, we know that business spending and consumer activity is weakening so perhaps the underlying economy is more fragile than we think. The labor market must cool before the Fed considers a change in policy so at this point, the Fed will likely increase rates by another 0.25% at the March meeting,” he wrote.


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