Bond yields fell on Friday ahead of key employment data that could determine the size of the Federal Reserve’s two-week rate hike.
what’s happening
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Yield on 2-year government bonds
TMUBMUSD02Y,
4.834% It was down 2.9 basis points to 4.85%. Yields move in the opposite direction of price.
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10 year government bond yield
TMUBMUSD10Y,
3.854% It was down 5.1 basis points to 3.86%.
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30 year government bond yield
TMUBMUSD30Y,
3.820% was down 3.3 basis points to 3.82%.
what drives the market
All eyes were on the Department of Labor’s jobs report scheduled for 8:30 a.m. ET. Economists polled by The Wall Street Journal expect 225,000 jobs outside the agriculture sector to be created in February, keeping the unemployment rate at 3.4%.
Federal Reserve Chairman Jerome Powell said at a congressional hearing that the central bank could resume larger rate hikes depending on data on employment and inflation.
Paradoxically, part of the support for government bonds comes from the turmoil in the banking sector, itself tied to a significant inversion of the US Treasury yield curve. SVB Financial, the parent company of Silicon Valley Bank
SIVB,
After selling a portfolio of loss-making Treasury bills, he said he was raising equities to fill about a $2 billion hole in his balance sheet.
Banking stocks fell in the US on Thursday and in Europe and Japan on Friday.
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