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8 Jan 2015
Treasury yield curve continues to steepen as investors await US jobs report
FXStreet (Mumbai) - The long duration Treasury yields continue to outperform those of the shorter duration as investors look towards the December Non-farm payrolls (NFP) data in the US due tomorrow, which may show strength in the labor market.
The 10-year yield has advanced 5.7 basis points to 2.009%, while the 30-year yield is up 7.1 basis points to 2.589%. Meanwhile, the 2-year yield is down almost 1 basis points to 0.609% and the 1-year yield is down 1.1 basis points to 0.238%.
The yields at the short-end of the curve have under performed since the Federal Reserve (Fed) minutes released yesterday erased the possibility of an interest rate hike before late April. Thus, the 2-year yield, known to mimic short-term interest rate expectation in the US has weakened. Meanwhile, the yields at the long-end received a double boost as equity markets across the globe strengthened, thereby reducing the safe haven demand for the long-end Treasuries.
Moreover, the upbeat ADP report and the fall in the weekly claims released today has pushed up expectations of a strong NFP print tomorrow. Consequently, the yield curve may continue to steepen as we head into tomorrow’s NFP report.
The 10-year yield has advanced 5.7 basis points to 2.009%, while the 30-year yield is up 7.1 basis points to 2.589%. Meanwhile, the 2-year yield is down almost 1 basis points to 0.609% and the 1-year yield is down 1.1 basis points to 0.238%.
The yields at the short-end of the curve have under performed since the Federal Reserve (Fed) minutes released yesterday erased the possibility of an interest rate hike before late April. Thus, the 2-year yield, known to mimic short-term interest rate expectation in the US has weakened. Meanwhile, the yields at the long-end received a double boost as equity markets across the globe strengthened, thereby reducing the safe haven demand for the long-end Treasuries.
Moreover, the upbeat ADP report and the fall in the weekly claims released today has pushed up expectations of a strong NFP print tomorrow. Consequently, the yield curve may continue to steepen as we head into tomorrow’s NFP report.