Treasury yields were rising to start the new month, third quarter and second half of 2021. Long-dated debt is coming off a quarter that saw the sharpest yield declines since the first quarter of 2020.
Investors are awaiting a batch of U.S. economic reports, headlined by weekly jobless claims at 8:15 a.m. Eastern and manufacturing reports starting at 9:45 a.m.
How Treasurys are performing
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The 10-year Treasury note
TMUBMUSD10Y,
1.479%
was yielding 1.477%, versus 1.443% at 3 p.m. on Wednesday. Yields for debt rise as prices fall.
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The 30-year Treasury bond yield
TMUBMUSD30Y,
2.099%
was at 2.099%, compared with 2.065% a day ago.
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The 2-year Treasury note
TMUBMUSD02Y,
0.258%
was yielding 0.251%, up from 0.247% on Wednesday.
Fixed-income drivers
Ahead of the U.S. nonfarm payrolls report on Friday from the Labor Department, investors are awaiting a report on jobless benefit claims for the week ended June 26, which is expected to show claims at 395,000, compared with 411,000 in the week ended June 19.
Meanwhile, the IHS Markit on manufacturing sector purchasing managers’ index final reading for June is scheduled for 9:45 a.m. ET, followed by a more closely followed reading from the Institute for Supply Management at 10.00 a.m.
A report on construction spending is also due at 10 a.m.
Among Fed speakers, Atlanta Federal Reserve President Raphael Bostic is slated to speak at 2 p.m.
What strategists are saying
“Treasuries were little changed during the overnight session with the bulk of the quarter-end bid being retained. This implies more upside for yields to absorb a solid NFP reports while nonetheless revealing an ongoing interest in Treasuries even with 10-year yields
“In keeping with our broader range-trading thesis for this summer, we’re reluctant to stand in front of any backup in yields associated with a strong payrolls report, but would look to add duration in the wake of the report regardless of the initial price action,” the BMO analysts wrote. “Said differently, the event-risk represented by the BLS release has us sidelined and should yields spike following the June update, we’d consider it a buying opportunity as opposed to the beginning of a bearish trend,”
