BOND REPORT: Treasury Yields Edge Higher Ahead Of Jobless Claims

By William Watts, MarketWatch Features Dow Jones Newswires

Treasurys edged lower Thursday, pushing yields up marginally, as investors awaited data on weekly jobless claims a day ahead of the November employment report.

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What are yields doing?

The yield on the benchmark 10-year Treasury note rose 0.8 basis point to 2.347%, while the yield on the 2-year note rose 0.4 basis point to 1.815%. The yield on the 30-year Treasury bond , also known as the long bond, rose 0.3 basis point to 2.734%.

Yields and debt prices move in opposite directions.

What are investors watching?

The Labor Department will release data on weekly jobless claims at 8:30 a.m. Eastern. Analysts surveyed by MarketWatch expect the number of first time claims for jobless benefits filed in the latest week to come in at 240,000, up slightly from 238,000 the previous week.

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Third-quarter flow of funds data is due at noon Eastern, while October consumer credit data is scheduled for 3 p.m. Eastern.

The main data event of the week comes Friday morning. Economists surveyed by MarketWatch expect data to show the U.S. economy added 200,000 jobs in November after a 261,000 rise in nonfarm payrolls in October. The unemployment rate is forecast to remain at 4.1%.

See:Don't expect strong U.S. hiring to keep up in 2018 (http://www.marketwatch.com/story/dont-expect-strong-us-hiring-to-keep-up-in-2018-2017-12-02)

(http://www.marketwatch.com/story/dont-expect-strong-us-hiring-to-keep-up-in-2018-2017-12-02)Investors also continue to keep tabs on the progress of tax legislation. (http://www.marketwatch.com/story/dont-expect-strong-us-hiring-to-keep-up-in-2018-2017-12-02)

What are analysts saying?

Bond investors are trying to work out whether corporate tax cuts, if passed, will influence the pace of monetary tightening by the Federal Reserve, economic growth, the budget deficit, trade deficit and more, said Steven Barrow, currency and fixed-income strategist at Standard Bank, in a note.

Standard Bank's bias is for longer-term yields to trend higher, but Barrow sees scope for an overdue return to volatility.

"For while the U.S. macroeconomic situation seems to be more conducive to higher long-term yields, as the economy improves, spare capacity is used, the Fed tightens and price pressure slowly builds, the argument that overvalued asset prices, like stocks, could slump and produce much lower Treasury yields also seems to be rising all the time," Barrow said.

(END) Dow Jones Newswires

December 07, 2017 08:21 ET (13:21 GMT)