LONDON, March 8 U.S. Treasury yields crept up to
new two-week highs on Friday as investors positioned for an
above forecast jobs number, after a recent string of upbeat data
made investors optimistic about the economic outlook.
Ten-year U.S. Treasury yields edged higher to
touch 2.01 percent in early trading and were last little changed
on the day at 2.00 percent.
The U.S. economy is expected to have added 160,000 non-farm
jobs to its payroll last month, according to a Reuters poll of
economists, a slight improvement on January's 157,000 count.
But analysts say market expectations are for an even higher
number and a 160,000 figure could pave the way for some
"If we get 160,000 I think the market will be slightly
disappointed," one trader said. "The data has been pretty
reasonable out of the U.S. ... so you naturally should see that
feed into higher employment numbers."
The differing economic outlook for the United States and the
euro zone has seen the 10-year yield gap
between German and U.S. bonds rise above 50 basis points to its
highest since January 2011.
An above consensus jobs number could see that spread widen
further but that move would be limited, said Philip Shaw, chief
economist at Investec.
"At the end of the day there is still a substantial
correlation between economic performance in the euro zone as a
whole and the U.S. so there has to be a limit to that spread
widening," Shaw added.