Investors disregard grim jobs report, again

Credit: REUTERS/Lee Jae Won

By Ross Kerber

BOSTON, April 3 (Reuters) - U.S. Treasury yields held steady on Friday despite a grim federal jobs report for the second day in a row, as investors tried to grasp the full impact of the COVID-19 pandemic caused by the new coronavirus.

The yield on the benchmark U.S. 10-year note US10YT=RR was down 3.8 basis points at 0.5885% in morning trading.

That was little changed from where it stood at 8:30 a.m. EDT (1230 GMT) when a closely watched U.S. Labor Department report showed the American economy shed 701,000 jobs in March. The figure signaled the abrupt end of a historic 113 straight months of employment growth as stringent measures to control the novel coronavirus outbreak shuttered businesses and factories, confirming a recession is under way.

For Treasuries, the dynamic was similar to Thursday when investors also disregarded a record rise in jobless claims to more than 6 million.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 35 basis points, about 2 basis points lower than at Thursday's close.

Wall Street's main indexes were also little changed on Friday. Analysts said the muted market reaction to the dramatic jobs reports reinforced how investors are focused more on measures of public health and the effectiveness of government responses.

"This is the smallest market impact I’ve ever seen from the payrolls number," said Justin Lederer, Treasury analyst for Cantor Fitzgerald.

"This data doesn't mean that much, until we get a better picture of how the whole situation plays out," he said.

The two-year US2YT=RR U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 1.7 basis points at 0.2368% in morning trading.

April 3 Friday 9:53AM New York / 1353 GMT

Price

US T BONDS JUN0 UScv1

182-12/32

0-27/32

10YR TNotes JUN0 TYcv1

139-36/256

0-64/256

Price

Current Yield %

Net Change (bps)

Three-month bills US3MT=RR

0.0875

0.089

-0.007

Six-month bills US6MT=RR

0.145

0.1471

-0.003

Two-year note US2YT=RR

100-70/256

0.2368

0.017

Three-year note US3YT=RR

100-154/256

0.2943

0.015

Five-year note US5YT=RR

100-150/256

0.3812

-0.007

Seven-year note US7YT=RR

100-216/256

0.5019

-0.034

10-year note US10YT=RR

108-184/256

0.5885

-0.038

30-year bond US30YT=RR

119-44/256

1.2308

-0.037

DOLLAR SWAP SPREADS

Last (bps)

Net Change (bps)

U.S. 2-year dollar swap spread

22.75

-0.25

U.S. 3-year dollar swap spread

14.00

-1.00

U.S. 5-year dollar swap spread

10.25

-1.00

U.S. 10-year dollar swap spread

4.25

-0.75

U.S. 30-year dollar swap spread

-44.00

-2.75

(Reporting by Ross Kerber; editing by Jonathan Oatis)

((ross.kerber@thomsonreuters.com; (617) 856 4341; Reuters Messaging: Ross.Kerber.Reuters.com@Reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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