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U.S. Treasury yields held their ground on Friday ahead of a monthly jobs report that could bolster hopes that a strong labor market and brisk consumer spending will drive the U.S. expansion forward.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, -0.23% was flat at 1.856%, while the 2-year note rate TMUBMUSD02Y, -0.27% was up 0.4 basis point to 1.580%. The 30-year bond TMUBMUSD30Y, -0.42% edged 0.3 basis point lower to 2.327%.
What’s driving Treasurys?
The labor market’s health will draw the spotlight with the U.S. Labor Department’s employment report for December at 8:30 a.m. ET. Analysts polled by MarketWatch, on average, expect the U.S. economy to add 165,000 jobs, up from 266,000 in November. The unemployment rate is forecast to hold steady at 3.5%, and for average hourly earnings to climb 0.3%.
Investors have attributed the longest U.S. economic expansion on record to the strength of households which have helped weather the global slowdown drive by the U.S. – China trade war.
An earlier report by Automatic Data Processing on Wednesday suggested the U.S. economy continued to rack up hefty job gains. Private-sector payrolls increased by 202,000 in December, from 124,000 in the prior month in the ADP report.
See: Job creation seen tapering off in December amid tight labor market and slower economy
Read: U.S. jobless claims fall for 4th week in a row to 214,000, back near post-recession lows
What did market participants’ say?
“Payrolls should come in 150k-190k against the upper side of consensus at 180k. Just a normal number for December could send yields up 3-5bp this morning before they ease back before the weekend,” wrote Jim Vogel, an interest rate strategist at FHN Financial.
