Bond Yields Near Highest Levels in More Than a Week

Bond yields are currently near their highest levels in over a week, as the market reacts to data indicating that the U.S. labor market remains strong.

What’s Happening

2-Year Treasury Yield:

The yield on the 2-year Treasury (TMUBMUSD02Y, 4.854%) is currently at 4.85%, down 1.2 basis points. It’s important to note that yields and prices move in opposite directions.

10-Year Treasury Yield:

The yield on the 10-year Treasury (TMUBMUSD10Y, 3.856%) has remained relatively stable at 3.85%.

30-Year Treasury Yield:

The yield on the 30-year Treasury (TMUBMUSD30Y, 3.900%) stands at 3.9%, down 1.1 basis points.

What’s Driving Markets

Yields experienced a surge on Thursday following the release of data showing that jobless claims had fallen more than expected to 228,000 in the week ending July 15. Furthermore, the Philadelphia Fed manufacturing index showed positive news, as the expectations index rose to its highest level in 23 months.

Jim Reid, a strategist at Deutsche Bank, explains, “With these more positive releases, investors have adjusted their expectations to reflect a higher likelihood of future rate hikes.”

No economic data is set to be released on Friday as traders prepare for next week’s Federal Reserve interest-rate decision. Economists at ING forecast a quarter-point increase, stating, “Inflation is moderating but remains above target. With a tight job market and resilient activity, officials may feel compelled to take action.”

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