TREASURIES-U.S. 10-year yields above 2 pct before jobs report

Fri Feb 1, 2013 6:16am EST

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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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