Treasury yields rise as attention shifts to jobs data

U.S. Treasury yields increased on Thursday as investors analyzed the latest labor market data and assessed the overall economic conditions. As of 4:42 a.m. ET, the yield on the 10-year Treasury note had risen by over two basis points to 3.8056%. Meanwhile, the yield on the 2-year Treasury note was at 3.6539%, after climbing by more than one basis point. It's important to note that yields and prices of Treasuries have an inverse relationship, meaning when yields rise, prices fall. One basis point is equivalent to 0.01%. 

Investors are closely monitoring the state of the economy as attention shifts to the latest jobs data. On Wednesday, figures from ADP revealed that private payrolls increased by 143,000 in September, surpassing both August’s growth of 103,000 and the forecasted 128,000. This data indicates that there may still be some resilience in the labor market despite signs of easing. The focus now turns to Thursday's release of weekly initial jobless claims and Friday's crucial September jobs report from the U.S. Labor Department’s Bureau of Labor Statistics, which will include nonfarm payrolls and the unemployment rate.

These upcoming numbers are significant as they could influence the Federal Reserve's monetary policy decisions, particularly regarding potential interest rate cuts. The Fed has two more meetings scheduled for 2024, and earlier this week, Federal Reserve Chairman Jerome Powell suggested that there could be two additional cuts of 25 basis points each this year if economic data remains consistent.

Additionally, on Thursday, investors will be looking at ISM’s services purchasing managers’ index (PMI) for September to gain further insights into the state of the economy. Meanwhile, geopolitical developments continue to be a concern as tensions in the Middle East escalated earlier this week. This situation adds a layer of uncertainty for traders regarding its potential impact on global markets.


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