U.S. Treasury yields rose on Friday as investors awaited key labor market data and assessed the outlook for the economy, and especially the financial sector.
At 7:27 a.m. ET, the yield on the 10-year Treasury was up by around 5 basis points to 3.409%. The 2-year Treasury was last trading at 3.827% after rising by 10 basis points, recouping some of Thursday’s losses.
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Yields and prices move in opposite directions. One basis point equals 0.01%.
Treasury yields had declined on Thursday as concerns about a banking crisis re-emerged, prompting many investors to seek out traditionally safer assets like government bonds. Regional bank PacWest Bancorp previously announced that it was weighing strategic options.
Investors also continued to consider what could be next for Federal Reserve policy. The central bank had announced a further 25 basis point interest rate hike on Wednesday and indicated that rate increases may be paused imminently.
Despite Fed Chairman Jerome Powell suggesting that it was too early to cut rates, investors considered whether the central bank would have to do so later in the year as recession fears spread. Powell also reiterated that any further policy decisions would be data-dependent.
Several key data points that could inform the Fed’s next moves are expected Friday. That includes April’s nonfarms payroll, unemployment and wage growth figures, which will reflect whether there has been any easing of the labor market.
Economists surveyed by Dow Jones are expecting the report to show that 180,000 jobs have been added and the unemployment rate to have risen to 3.6%. That comes after ADP’s private payrolls count rose by 296,000 in April, far higher than the expected 133,000.
