U.S. Treasury yields climb as vaccine rollout, jobs report come in focus


U.S. Treasury yields rose Monday as investors eyed the all-important employment report at the end of the week, which could underline the economy’s strength as vaccination rates accelerate.

The bond market will be closed early on April 2 in observance of the Good Friday holiday at 12 p.m. ET., based on recommendations from the Securities Industry and Financial Markets Association.

What are Treasurys doing?

The 10-year Treasury note yield
TMUBMUSD10Y,
1.712%

climbed 6.3 basis points to 1.721%, following the sharpest weekly yield drop since December. The 2-year note yield
TMUBMUSD02Y,
0.136%

was flat at 0.143%, while the 30-year bond yield
TMUBMUSD30Y,
2.410%

surged 5.9 basis points to 2.424%.

What’s driving Treasurys?

The bond market has struggled to find its footing amid occasional bouts of selling that have frightened the rest of Wall Street, with analysts fretting higher yields could punish vulnerable stocks.

On Monday, bond market investors appeared to shrug off asset liquidations sparked by Archegos Capital Management, run by Bill Hwang, The Wall Street Journal reported. Losses tied to a recent fire sale of assets were expected to incurred by Credit Suisse Group AG and Nomura Holdings Inc., the firms said, without naming Archegos.

Investors had worried about the possibility of a spillover from the sales that reached a crescendo Thursday and Friday but fixed-income markets appeared unaffected.

In fact, Treasurys saw some renewed pressure Monday, following some more positive developments on the vaccine front. New York will expand COVID-19 vaccine eligibility to those 30 years and older starting from Tuesday, Gov. Andrew Cuomo said on Monday.

Meanwhile, President Joe Biden also announced that 90% of adults in the U.S. will be eligible for coronavirus vaccines and will have a vaccination site within 5 miles of where they live by April 19.

Looking ahead, the official March employment report and the Institute for Supply Management’s manufacturing index are due later this week.

Ultimately, investors will keep a close eye on the recovery of the labor market. The U.S. likely added 600,000-plus new jobs this month, which would be the biggest increase in hiring since early fall.

Some investors suggested job gains could even exceed 1 million, noting that high-frequency data tracking the reopening of the U.S. economy suggested the labor market recovery was speeding up.

Read: Hiring is speeding up again and jobs are coming back as the U.S. economy gains steam

What did market participants say?

“As we go forward, payrolls on Friday will be closely watched. It is always important to get that number so we can contextualize where” the economy is at, said Padhraic Garvey, regional head of research for the Americas at ING, in an interview. “The macro story is still very supportive of another push higher” in yields.



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