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DJ Jobs Report Looks Weak Enough to Prevent Bond Selloff

· 02/05/2021 10:55

By Sam Goldfarb

U.S. government bonds have been choppy this morning but it's becoming clearer that the lackluster January jobs report (https://www.wsj.com/articles/january-jobs-report-unemployment-rate-2021-11612475063) has helped avert a big selloff that some analysts thought was possible heading into the day.

Before Friday, longer-term yields had climbed along with stocks this week, as investors focused on a brightening economic outlook and embraced riskier assets. A strong jobs report could have added to that move--especially with a slate of Treasury debt auctions next week that could have also depressed demand.

The yield on the 10-year Treasury note was recently 1.148%, according to Tradeweb, up from 1.140% Thursday but down from 1.172% just before the jobs data. Yields rise when bond prices fall.

Many analysts generally expect yields to rise further this year, as coronavirus vaccinations](https://www.wsj.com/articles/astrazeneca-vaccine-effective-against-u-k-covid-19-variant-in-study-11612530912) and [government stimulus (https://www.wsj.com/articles/gop-puts-minimum-wage-school-reopenings-in-covid-aid-spotlight-11612467876) boost the economy and investors start planning for the day that the Federal Reserve raises short-term interest rates.

But they also say that the path to get there could be bumpy.

There needs to be "some kind of real development to get the next big leg" higher in yields, said Blake Gwinn, head of U.S. rates strategy at NatWest Markets. That, he said, could entail more progress in Congress toward the next coronavirus relief package.

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February 05, 2021 10:55 ET (15:55 GMT)

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