Treasuries climbed as a weaker-than-estimated jobs reading signaled narrowing room for the Federal Reserve to keep raising interest rates.
(Bloomberg) — Treasuries climbed as a weaker-than-estimated jobs reading signaled narrowing room for the Federal Reserve to keep raising interest rates.
Two-year yields headed toward their lowest levels since September, slumping as much as 11 basis points to around 3.7%. Financial shares weighed on equities, with Western Alliance Bancorp tumbling as the regional bank updated its financial disclosures without saying more about its deposit balance. FedEx Corp. climbed on plans to cut $4 billion in costs. Gold extended its surge past $2,000 an ounce.
US companies added fewer jobs than forecast while wage growth slowed, underscoring labor demand that’s showing some signs of cooling. Private payrolls rose 145,000 last month after an upwardly revised 261,000 increase in February, according to figures from ADP Research Institute in collaboration with Stanford Digital Economy Lab.
“ADP private employment tally was much weaker than expected, and with other high-frequency labor market metrics, suggests deteriorating labor-market growth,” said Stan Shipley, economist at Evercore ISI. “Whisper fears suggest a tepid jobs report on Friday.”
The upcoming government jobs report is forecast to show US employers added about a quarter of a million jobs last month and the unemployment rate held at a historically low level.
Fed Bank of Cleveland President Loretta Mester said officials will need to raise interest rates “a little bit higher” and then hold them there for some time to bring inflation back toward their goal. “We certainly are focused on inflation and making sure that inflation gets back down to 2% over time,” she told Bloomberg Television.
Key events this week:
- US initial jobless claims, Thursday
- St. Louis Fed President James Bullard speaks, Thursday
- US unemployment, nonfarm payrolls, Friday
- Good Friday. US stock markets closed, bond markets close for part of the day
Some of the main moves in markets:
Stocks
- The S&P 500 fell 0.2% as of 9:30 a.m. New York time
- The Nasdaq 100 fell 0.3%
- The Dow Jones Industrial Average was little changed
- The Stoxx Europe 600 fell 0.2%
- The MSCI World index fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0944
- The British pound fell 0.2% to $1.2471
- The Japanese yen rose 0.4% to 131.15 per dollar
Cryptocurrencies
- Bitcoin rose 0.9% to $28,504.59
- Ether rose 2.1% to $1,917.48
Bonds
- The yield on 10-year Treasuries declined three basis points to 3.31%
- Germany’s 10-year yield declined three basis points to 2.22%
- Britain’s 10-year yield was little changed at 3.44%
Commodities
- West Texas Intermediate crude was little changed
- Gold futures rose 0.3% to $2,043.90 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Srinivasan Sivabalan.
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