US Treasury yields saw an uptick on Thursday as investors turned their attention to the upcoming January nonfarm payrolls report, due for release on Friday.
The 10-year Treasury yield increased by more than two basis points, reaching 4.4462%, while the 2-year Treasury yield also rose more than two basis points to 4.2139%.
Treasury yields and prices have an inverse relationship, meaning as yields rise, prices fall. A basis point is equal to 0.01%.
Investors are eagerly awaiting the nonfarm payrolls report, which will offer insight into the US labor market and the number of people employed. Economists polled by Dow Jones predict that 175,000 jobs were added in January, with the unemployment rate expected to remain stable at 4.1%.
The data will provide crucial information about the health of the labor market, which is a key factor influencing Federal Reserve policy decisions. In addition to the payrolls report, investors will also be keeping an eye on Thursday’s weekly jobless claims report and monitoring speeches from Federal Reserve officials, including Governor Christopher Waller and San Francisco Fed President Mary Daly.
Wednesday’s ADP report showed a better-than-expected increase in private payrolls, with 183,000 jobs added in January, surpassing economists’ forecast of 150,000. This was an improvement over the 176,000 jobs created in December. The stronger-than-anticipated ADP data has contributed to market optimism about the state of the US job market.
Meanwhile, concerns about tariffs, which had spiked earlier in the week following President Donald Trump’s tariff announcements, have eased. Trump had initially announced 25% tariffs on goods imported from Mexico and Canada, along with a 10% levy on Chinese goods. However, the administration has since paused the tariffs on Mexican and Canadian goods for 30 days after both countries agreed to measures to curb fentanyl trafficking into the US.
In response, China imposed its own tariffs of up to 15% on US liquefied natural gas and select products, effective February 10.
In Asia, Japan’s Government Bonds (JGBs) edged higher in the morning session, following the positive performance of US Treasurys overnight. JGBs and Treasurys tend to move in tandem, and the Bank of Japan’s scheduled purchase operations may encourage investors to focus on yield-curve flatteners. The Japanese Finance Ministry’s upcoming auction of ¥900 billion in 30-year sovereign debt is expected to be absorbed smoothly, with the 30-year JGB yield hovering around 2.3%.
CNBC and the Wall Street Journal contributed to this report.
