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DJ Jobs Data, Stimulus Expectations Whipsaw Treasury Yields

· 02/05/2021 10:13

By Julia-Ambra Verlaine

The jobs report whipsawed U.S. government bond yields. Investors said they are gauging the crosscurrents of weak economic data and the prospect of greater economic stimulus from Washington D.C.

The yield on the benchmark 10-year Treasury recently traded at 1.145%, down from a post-report high above 1.18% and little changed from Thursday's close, according to Tradeweb. Yields fall when bond prices rise.

The worse-than-expected January jobs data followed the Senate's passage of a budget plan (https://www.wsj.com/articles/gop-puts-minimum-wage-school-reopenings-in-covid-aid-spotlight-11612467876?mod=hpleadpos5) for President Biden's $1.9 trillion pandemic relief package. Some investors fear that an acceleration in government borrowing could increase the supply of debt while fueling a pickup in inflation. The Treasury plans a $41 billion auction of 10-year notes Wednesday, $58 billion of three-year notes on Tuesday and $27 billion of 30-year bonds on Thursday.

Treasury yields often rise heading into auctions as investors make room in their portfolios for the new debt.

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(END) Dow Jones Newswires

February 05, 2021 10:13 ET (15:13 GMT)

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