US Treasury yields held firm on Friday ahead of what some are billing as an explosive employment report for March. The bond market will remain open until 12 p.m. ET in observance of the Good Friday holiday, even when European stocks and most other US markets are closed. What are Treasuries doing? The yield on the 10-year Treasury note TMUBMUSD10Y, 1.680% remained flat at 1.679%, while the rate of the 2-year note TMUBMUSD02Y, 0.168% rose one basis point to 0.170%. The yield on the TMUBMUSD30Y 30-year bond, 2.336% fell 0.2 basis points to 2.337%. Bond prices move inversely to yields.
What drives the Treasurys? All eyes will be on the US Department of Labor’s March employment report as investors look for additional signs that the US economy is gathering momentum. Analysts surveyed by MarketWatch have produced a forecast of 675,000, which would represent the largest increase in employment since October. The unemployment rate is expected to fall to 6%, from 6.2% in February, while average hourly earnings are forecast to increase by 0.1%. However, even if the employment report meets the market’s high expectations, the US economy will still be several million jobs away from pre-pandemic levels. Read: Why the employment report will be important, even if no one is around to negotiate it This crucial economic data will come when liquidity is likely to be tight due to the Good Friday holiday. That could exacerbate any wild swings in the bond market, following the employment report. What did market participants say? “There are all kinds of conversations and people talking freely about + 1 million or more job earnings tomorrow. It‘s hard to argue against it, ”said Tom Porcelli, chief US economist at RBC Capital Markets. But he warned that March has been a difficult month to forecast due to the extension of federal unemployment benefits and the accelerated reopening of the US economy.