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TREASURIES-Longer-term yields higher in volatile session after jobs report

· 02/05/2021 09:46
TREASURIES-Longer-term yields higher in volatile session after jobs report

By Ross Kerber

- Longer-term U.S. Treasury yields were higher in choppy trading on Friday after a report showing employment growth rebounded less than forecast in January, strengthening expectations of more stimulus spending in Washington.

The benchmark 10-year yield US10YT=RR was up 1.4 basis points at 1.1532% in morning trading after it reached as high as 1.188%, its highest since March 20, 2020.

In addition a closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indicator of economic expectations, was at 104 basis points, about 2 basis points higher than Thursday's close and its highest since May 2017.

U.S. employment growth rebounded less than expected in January and job losses the prior month were deeper than initially thought, strengthening the argument for additional relief money from the government to aid the recovery from the COVID-19 pandemic.nL1N2KA34D

Analysts described the results as having mixed implications for government bond markets and giving traders a chance to take profits after yields on longer-term U.S. notes rose in recent days.

"The jobs report isn’t bad. You should expect a lot of volatility at a time like this," said Subadra Rajappa, head of U.S. Rates Strategy for Societe Generale in New York. The unemployment rate was at 6.3% in January, which Rajappa said put it close to achieving the 5% targeted by the U.S. Federal Reserve.

The two-year US2YT=RR U.S. Treasury yield, which typically moves in step with interest rate expectations, was down less than a basis point at 0.1112% in morning trading.


February 5 Friday 9:29AM New York / 1429 GMT


Price

Current Yield %

Net Change (bps)

Three-month bills US3MT=RR

0.0375

0.038

0.000

Six-month bills US6MT=RR

0.0475

0.0482

-0.005

Two-year note US2YT=RR

100-7/256

0.1112

-0.004

Three-year note US3YT=RR

99-212/256

0.1838

-0.005

Five-year note US5YT=RR

99-152/256

0.4576

-0.001

Seven-year note US7YT=RR

99-148/256

0.8123

0.003

10-year note US10YT=RR

97-112/256

1.1532

0.014

20-year bond US20YT=RR

93-168/256

1.7562

0.015

30-year bond US30YT=RR

92-208/256

1.9441

0.012





DOLLAR SWAP SPREADS




Last (bps)

Net Change (bps)


U.S. 2-year dollar swap spread

8.75

0.25


U.S. 3-year dollar swap spread

9.75

0.50


U.S. 5-year dollar swap spread

12.25

0.50


U.S. 10-year dollar swap spread

7.50

0.50


U.S. 30-year dollar swap spread

-21.00

1.00




(Reporting by Ross Kerber in Boston; editing by Jonathan Oatis)

((ross.kerber@thomsonreuters.com; (617) 856 4341; Reuters Messaging: Ross.Kerber.Reuters.com@Reuters.net))