Treasury yields reap gains ahead of NFP data

Treasury yields rose on Thursday as investors remained focused on the upcoming key NFP data. The yield on the benchmark 10-year Treasury note climbed 6 basis points to 1.831%. The yield on the 30-year Treasury bond added 5 basis points to reach 2.152%.

Yields move inversely to prices and 1 basis point is equal to 0.01%. The closely watched non-farm payrolls report is due out on Friday morning. Economists expect that 150,000 jobs will have been added in January.

Ahead of the Friday report, investors digested weekly jobless claims that came in a bit less than expected as companies looked to overcome the impact of the omicron spread.

Claims for the week ended Jan. 29 totaled 238,000, a touch lower than the 245,000 Dow Jones estimate, the Labour Department reported Thursday.

Investors are eager to see the extent to which labour force participation improves as we receive an update on workers’ willingness to reengage in the jobs market at this point in the pandemic. The realities of omicron and the spike in Covid cases seen in January obviously run as a counterforce to any reopening optimism that might otherwise have emerged with the new year, at least for the time being.

On Thursday, the European Central Bank has kept key interest rates unchanged despite record rises in inflation. The ECB said higher inflation will fade throughout the year even as the 19-member region has seen inflation reading hit a record 5.1% in January.

ECB President Christine Lagarde said Thursday: “Inflation is likely to remain elevated for longer than previously expected, but to decline in the course of this year.” Auctions are scheduled to be held on Thursday for $50 billion of 4-week bills and $40 billion of 8-week bills.