Bond yields fell on Friday ahead of key jobs data that could determine the size of the Federal Reserve’s interest rate hike in two weeks.
What is happening
The 2-year Treasury yield TMUBMUSD02Y,
it was 4.85%, down 2.9 basis points. Yields move in the opposite direction to prices.
The 10-year Treasury yield TMUBMUSD10Y,
it was 3.86%, down 5.1 basis points.
The 30-year Treasury yield TMUBMUSD30Y,
it was 3.82%, down 3.3 basis points.
What is driving the markets
Attention turned to the Labor Department’s jobs report, due at 8:30 am Eastern. Economists polled by the Wall Street Journal expect 225,000 nonfarm payroll jobs to have been created in February and the unemployment rate to remain at 3.4%.
Federal Reserve Chairman Jerome Powell said in congressional hearings that the central bank could resume larger rate hikes depending on what data on jobs and inflation say.
Support for bonds comes, paradoxically, from the turmoil in the banking sector, which is linked to the deep inversion of the Treasury yield curve. SVB Financial SIVB, parent of Silicon Valley Bank,
said it was raising capital to fill a nearly $2 billion hole in its balance sheet, after selling a portfolio of losing Treasuries.
Shares in the banking sector fell on Thursday in the US and on Friday in Europe and Japan.