BOND REPORT: Treasury Yields Slightly Higher After Congress Staves Off Government Shutdown

By FeaturesDow Jones Newswires

Treasury yields rose Friday after the federal government averted a shutdown, with investors waiting for the employment report before the Federal Reserve's meeting next week.

What did Treasurys do?

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The yield for the 10-year benchmark Treasury note rose to 2.380%, from 2.374% on late Thursday, while the 2-year note yield added to 1.815%, from 1.806%. The 30-year bond yield edged higher to 2.771%, versus 2.772%.

Bond prices move in the opposite direction of yields.

What's driving Treasurys?

Congress passed a two-week spending bill that will keep the lights on in federal agencies until Dec. 22. The extra breathing room will give Republicans the focus they need to pass their tax cuts and avoid the distraction of a potential government shutdown.

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%. But bond trading is likely to be muted as analysts say investors have put inflation data front and center at the expense of labor market data.

What did market participants say?

"In an environment where the unemployment rate is approaching 4, yet another strong payroll result will be limited in its impact for most market participants. until a tight labor market generates obvious wage pressures, most will remain unimpressed," said Stephen Stanley, chief economist for Amherst Pierpoint Securities.

What else is on investors' radar?

European bonds followed the action in the Treasurys market. The German 10-year government bond yield rose 1.34 basis point to 0.308%, while the French 10-year government bond yield rose 1.6 basis point to 0.625%.

(END) Dow Jones Newswires

December 08, 2017 08:28 ET (13:28 GMT)