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U.S. Treasury yields were tilting higher in early Monday’s trade as investors eyed the all-important jobs report at the end of the week.
What are Treasurys doing?
The 10-year Treasury note yield
TMUBMUSD10Y,
was up 1.2 basis points to 1.644%. The 2-year note rate
TMUBMUSD02Y,
was steady at 0.164%. The 30-year bond yield
TMUBMUSD30Y,
added 0.8 basis point to 2.310%.
What’s driving Treasurys?
Some first-tier data is due in the morning. The Institute for Supply Management will release their April reading of a manufacturing activity index, expected to come in at 65 by MarketWatch-polled analysts, up marginally from the previous month’s 64.7. A number above 50 indicates an expansion of economic activity.
Still, investors will remain focused on the nonfarm employment report at the end of the week. Economists are expecting close to a million job gains, adding to the signs of strength in the labor market.
See: Jobs are coming back as the U.S. economy speeds up and the coronavirus wanes
Investors say a string of strong jobs reports could force the Federal Reserve’s hand, prompting the U.S. central bank to start laying the groundwork for a tapering of asset purchases.
So far, most senior Fed officials have said it remains too early to talk about withdrawing policy accommodation. But Dallas Fed President Robert Kaplan broke ranks last week, saying the central bank should discuss cutting back its bond-buying at the earliest opportunity.
What did market participants say?
“Another blockbuster payroll report this Friday will naturally provide more food for thought and stir the debate in private over the best course of policy action later this year,” said Kenneth Broux, a strategist at Société Générale.
