Bond Yields Turn Lower Ahead of Open -- WSJ

The Wall Street Journal · 01/06/2023 09:15

-- Around 9 a.m. Friday, the benchmark 10-year Treasury note traded at 3.677%, down from its Thursday close at 3.727%, according to Tradeweb. The two-year yield fell to 4.391%, from 4.451% Thursday. Yields fall as bond prices rise. -- Falling yields suggest that traders are focusing on a bit of good news regarding inflation in the report: a smaller-than-expected rise in average wages. That is a negative for workers' paychecks but may reduce the demand pressure that has helped fuel soaring inflation in the last year and a half.

By Matt Grossman

After holding steady in the minutes after the report's release, government-bond yields have turned lower as traders think through the latest employment data's implications (https://www.wsj.com/articles/december-jobs-report-unemployment-rate-economy-growth-2022-11672961227) for the path of Federal Reserve policy.

"The overall wage picture is not quite as hot as it looked a month ago," wrote Thomas Simons, an economist at Jefferies.

In fed-funds futures markets, traders increased their bets on Friday that the Fed will choose a smaller 0.25-percentage-point rate hike when its next meeting ends on Feb. 1.

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(END) Dow Jones Newswires

January 06, 2023 09:15 ET (14:15 GMT)