TREASURIES-U.S. 10-year yields above 2 pct before jobs report
LONDON, Feb 1 (Reuters) - U.S. 10-year T-note yields rose above 2 percent in Europe on Friday, with investors positioning for payrolls data expected to show the speed of recovery in the U.S. job market is picking up. The median forecast from analysts polled by Reuters is for U.S. employers to have added 160,000 new jobs in January, up from 155,000 in December. Unemployment is expected to be unchanged at 7.8 percent. But traders said investors, who got used to mostly better-than-expected data last year, were positioning for an even higher number. Selling pressure on assets perceived as safe havens has thus increased, with T-note yields rising 2 basis points to 2.0047 percent. "Markets are now expecting something between 165,000 and 200,000," Rabobank strategist Philip Marey said, adding that the latter number would see T-note yields break decisively above 2 percent in the near term. "200,000 is an important threshold because it is more or less the data that the Federal Reserve will like to see ... Such a figure will give markets more confidence to move ahead on 10-year yields," he said. Ten-year yields posted the biggest monthly rise since March 2012 in January, gaining about 22 basis points, but they have so far struggled to stay above 2 percent, a major psychological resistance level. If the yield closes above 2.01 percent, a 61.8 percent retracement of the yield's fall from 2.40 to 1.38 percent in March-July last year, that could lead to a test of resistance from its channel top around 2.08 percent, George Davis, chief technical analyst at RBC Dominion Securities, said in report. T-note futures were 5/32 lower at 131-04/32. On Thursday, data showed initial weekly jobless claims rose off five-year lows to levels consistent with tepid job growth, with claims rising more than expected.
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