Friday, March 31, 2023
HomebondsYields rise from three-month lows as stocks recover

Yields rise from three-month lows as stocks recover

U.S. Treasury yields rose from three-month lows on Tuesday as stocks recovered, reducing the safe-haven demand for Treasurys, and as investors grappled with whether disappointing economic data will extend into Friday's highly anticipated jobs report.

A report showing U.S. factory activity was weaker than expected on Monday sent equity markets reeling, and adding to an already dramatic selloff caused by volatility from investors fleeing emerging market assets. A light economic calendar on Tuesday helped stabilize the markets, sending Treasuries yields back higher on reduced demand.

Benchmark 10-year notes were last down 13/32 in price to yield 2.627 percent, up from 2.58 percent late Monday.

The yields have fallen from over 3 percent at the beginning of the year.

(Read more: US manufacturing slows sharply in January)

Investors were concerned about whether continuing bad weather could upset Friday's jobs report for January, after harsh weather was blamed for recent economic weakness, including job gains that were well below expectations in December.

Employers are expected to have added 185,000 jobs in January, according to the median estimate of 101 economists polled by Reuters. Many investors are taking a more cautious stance than analysts' projections, though only a very pessimistic number is seen as likely to sway the Federal Reserve from continuing to reduce the size of its month bond purchases.

The Fed last week cut its monthly bond purchases by $10 billion, to $65 billion. The U.S. central bank is not due to meet again until March, which will give it time to evaluate more data before deciding if it should continue paring bond purchases.


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