BOND REPORT: Treasury Yields Steady Ahead Of Job Openings Data

By Sunny Oh Features Dow Jones Newswires

Treasury yields were mostly unchanged Tuesday as investors watched for further signs of a tightening labor market in the jobs opening data, which economists hope will stimulate wages and inflation and add support for monetary tightening this year.

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The 10-year benchmark Treasury note's yield rose 0.4 basis point to 2.258%. The 2-year Treasury note was steady at 1.355%, while the 30-year Treasury, known as the long bond rose 0.7 basis point to 2.840%. Bond prices move inversely to yields.

The Treasury yield curve steepened before the Job Openings and Labor Turnover Survey (https://www.bls.gov/jlt/)(JOLTS) at 10 a.m. Eastern. A steepening yield curve, which charts maturities against the returns of a bond, suggests investors are betting that a jump in hiring could stoke wage and inflation pressures. Higher consumer prices can erode the value of bond's fixed interest payments.

The Bureau of Labor Statistics reported openings in May fell by 301,000 to 5.66 million (http://www.marketwatch.com/story/hiring-in-may-strongest-since-2004-jolts-shows-2017-07-11), after a surge in hiring reflected the strong labor market. Economists said they expected another dip for June after the better-than-expected jobs report last week.

Although traders appeared to perk up at the incoming JOLTS numbers, they largely shrugged off overnight data showing signs of a slowdown in the global economy. The Japanese trade surplus came in at Yen518.5 billion ($4.7 billion) for June. Some analysts highlighted that the German trade surplus fell below expectations after exports fell for the time this yea (http://www.marketwatch.com/story/german-exports-fall-for-first-time-in-2017-2017-08-08)r, slipping to EUR22.3 billion ($26.3 billion) in the same month.

If major exporters like Germany are losing steam it could reverse the improving investor sentiment over the eurozone's economic revival, and prompt further caution from the European Central Bank as it attempts to steer away from years of easy-money policies.

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"When combined with yesterday's disappointing German industrial production figures, which declined for the first time this year, the data brings into question the assumption that core Europe has made it out of the woods of cyclical stagnation," said Ian Lyngen, head of U.S. rates strategy for BMO Capital Markets, in a note to clients.

The U.S. Treasury Department will auction off $24 billion of 3-year notes , one of three key debt sales this week. Trading for Treasurys can be influenced by auctions.

(END) Dow Jones Newswires

August 08, 2017 08:52 ET (12:52 GMT)