Treasury yields remained mixed early Thursday, with the 10-year and 30-year rates slipping further and shorter-end rates slightly higher, as initial jobless claims jumped to 222,000 and investors continued to assess the U.S.’s first confirmed case of the omicron variant of the coronavirus.
What are yields doing?
-
The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.441%
was at 1.421%, down from 1.433% at 3 p.m. Eastern on Wednesday. Yields and debt prices move in opposite directions. -
The 2-year Treasury yield
TMUBMUSD02Y,
0.610%
rose to 0.595%, from 0.563% Wednessday afternoon. -
The 30-year Treasury bond yield
TMUBMUSD30Y,
1.761%
dropped to 1.749%, down from 1.778% on Wednesday.
What’s driving the market?
Yields remained mixed in Thursday morning trade, following Wednesday’s announcement by the U.S. of its first confirmed case of the omicron variant involving a person from California. Meanwhile, data released on Thursday showed that initial jobless claims climbed 28,000 to 222,000 during Thanksgiving week.
Financial markets have been on a roller-coaster ride in recent sessions as investors attempted to come to grips with the prospect of a faster-than-expected tapering of bond purchases by the Federal Reserve, along with the implications of the omicron variant.
On Wednesday, the 30-year Treasury yield fell to its lowest level in almost 11 months after the U.S.’s announcement, while the 10-year rate dropped to its lowest since Nov. 9, based on 3 p.m. levels, according to Dow Jones Market Data.
The drop in long-dated yields came as rates five years or less remained higher, flattening the spread between 2- and 10-year rates and the gap between 5- and 30-year yields for a second session, according to Tradeweb data.
Wednesday’s trading included a wild, 1,000-point swing by Dow industrials as the U.S. confirmed its first omicron case, ushering in an unsettling phase of volatility.
Investors have also been focused on this week’s comments to lawmakers by Fed Chairman Jerome Powell, who said he said that he doesn’t think the central bank’s plan to pull back on asset purchases should disrupt financial markets. Powell has also surprised market participants, by opening the door to speeding the tapering process when policy makers meet later this month.
Ahead for later on Thursday are appearances by Fed Gov. Randal Quarles, who is set to speak at 11 a.m. Eastern time, and by Fed presidents Mary Daly and Tom Barkin, who are set to speak about the labor market around 11:30 a.m.
Friday’s data will include nonfarm payrolls for November.
What are analysts saying?
“Higher daily volatility has scrambled technical signals for benchmark interest rates,” Jim Vogel, executive vice president at FHN Financial, wrote in a note. “The effective range for 10s heading into payrolls is 1.40-1.55%; the potential for moves in that band is 5bp in any given hour.” Meanwhile, “the range for the 5-yr is also 15bp, from 1.13%-1.28%.”
This post was originally published on Market Watch
