BOND REPORT: Treasury Yield Curve Steepens Ahead Of Employment Report

By Sunny Oh Features Dow Jones Newswires

Nonfarm payrolls grew only by 98,000 in March

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The Treasury yield curve steepened Thursday before the much-awaited nonfarm payrolls report as investors look for a pick-up in economic data and less labor slack, both a gauge of whether inflation continues to have momentum.

The yield for the 10-year note rose 0.8 basis point to 2.363%. Bond prices move inversely to yields. The yield for the 2-year note edged off 0.4 basis point, and the 30-year bond, or the long bond, gained 0.4 basis point to 3.003%.

The Bureau of Labor Statistics will issue the closely watched nonfarm payrolls report for April at 8:30 p.m. Eastern. The same report will also include numbers for the unemployment rate and hourly earning growth.

Analysts expect a boost to job numbers from March, which only notched 98,000 (http://www.marketwatch.com/story/us-creates-98000-jobs-in-march-2017-04-07-81033623) additional payrolls, the smallest gain in almost a year. The yield curve, a line which maps yields across all maturities, steepened in early morning trading as investors expected a stronger job report. They will use the indicator to gauge the pace of economic growth, a faster rate can be bearish on bonds. At the same time, fewer added jobs could hint at a tight job market, a sign wages may push up and drive higher inflation.

Traders will await four Fed speakers on the docket for Friday. Federal Reserve vice chairman Stanley Fischer will give a speech at the Hoover Institution's monetary policy conference at Stanford University in Stanford, California at 11:30 a.m. Eastern. San Francisco Fed President John Williams, a non-voting member of the central bank's interest-rate setting committee, will talk at 12:45 p.m. Eastern.

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His speech will be closely followed by Chicago Fed President Charles Evans, voting member, and Boston Fed President Eric Rosengren, non-voting member, who will staff a panel at the same monetary policy conference in the Hoover Institution at 11:30 p.m. Eastern. Fed Chairwoman Janet Yellen will give a talk on "125 years of women's participation in the economy," but analysts said the topic of her speech will mean her remarks won't attract attention from investors.

(END) Dow Jones Newswires

May 05, 2017 08:28 ET (12:28 GMT)