Bond Yields Drop As Investors Wait On Latest Jobs Report

Published on

Bond yields dropped slightly downward to 1.299% in early trading on the benchmark 10-year Treasury note. The yield on the 30-year Treasury bond tilted down to 1.909%, as yields move in the opposite direction to prices.

Get Our Icahn eBook!

Get The Full Carl Icahn Series In PDF

Q2 2021 hedge fund letters, conferences and more

Bond Yields

As reported by CNBC, “The labor market is in focus ahead of the August jobs report which will play a major part in determining when and how the Federal Reserve will start unwinding its bond program.”

A Dow Jones poll among expert economists predicts that 750,000 jobs were created in August, sending the unemployment rate down to 5.2%.

Forecasts arrive just a few days after Jerome Powell, Chairman of the Federal Reserve admitted that the central bank is weighing the chance to taper its $120 billion a month bond-buying program before the end of 2021.

Still, he underlined that the economy should wait for more vigorous employment data “before any further decisions would be made.”

Despite the 10-year Treasury yield caught a breath in the last weeks, but still far below the highs seen at the beginning of the year.

Tom Essaye of the Sevens Report was quoted as saying on bond yields on CNBC: “The 10-year yield continues to build upside momentum, and Powell’s dovish tone on Friday won’t derail that momentum.”

Waiting On Key Stats

“However, the 10-year yield needs to break through resistance at 1.36% and then at 1.41% before it can mount a test of the April downtrend,” he said.

In this outlook, investors are keenly waiting on some of the hottest data heading into the last part of the year.

On Friday, job data for August will be released, after Tuesday’s consumer confidence data and Wednesday’s manufacturing data by the Institute for Supply Management.

The ADP’s private sector payroll data will be disclosed on the same day, and it is “seen as a sort of preview for Friday’s government jobs report.”

CNBC reports that U.S. stock futures were “steady in overnight trading on Sunday, though it’s expected that U.S. stocks could stay range-bound until the release of August’s jobs report.”