By Saumya Vaishampayan, MarketWatch
NEW YORK (MarketWatch) — Treasurys held steady on Monday in the wake of a strong jobs report on Friday that pushed yields on the 10-year note to their highest level in almost a year.
Yields on the benchmark 10-year Treasury note 10_YEAR +0.34% were steady at 2.04% in morning trade. Yields move inversely to prices and one basis point is one one-hundredth of a percentage point.
February’s nonfarm-payrolls data, released Friday, showed the U.S. economy added more jobs than expected as the unemployment rate fell to its lowest level since December 2008. U.S. economy adds 236,000 jobs in February
A wave of stronger U.S. economic data last week led to the largest weekly gain in yields for the 10-year note since Jan. 4 and has sparked debate about how much improvement is sufficient to move rates even higher or to change the Federal Reserve’s monetary policy. Bond rally shows fresh signs of fatigue
“In the end, we still expect rangebound conditions to remain a feature in the Treasury market,” William O’Donnell of RBS wrote in a research note. “Looming budget cuts could also take the sheen out of future nonfarm payroll prints.”
Some large money managers are taking steps to prepare for an eventual rise in interest rates by buying debt with floating interest rates and making bearish bets on U.S. Treasurys, according to an article in The Wall Street Journal on Monday. While the Fed won’t reverse its monetary policy that is keeping interest rates low “anytime soon,” the change, when triggered, could be very swift, according to the article.
Yields on the 30-year U.S. bond 30_YEAR +0.03% were steady at 3.25% as were yields on the five-year note 5_YEAR +1.01% at 0.89%.
Yields on the 10-year Italian bond IT:10YR_ITA +1.33% gained 6 basis points to 4.59%. Italian sovereign debt was downgraded to a BBB-plus rating from A-minus by Fitch Ratings on Friday. The ratings firm cited uncertainty about Italy’s fiscal problems after its inconclusive parliamentary elections in February. Italian bond yields edge higher after downgrade
The U.S. Treasury Department is scheduled to sell $21 billion in 10-year notes on Wednesday and $13 billion in 30-year bonds on Thursday.
There is no economic data scheduled for release Monday.
Saumya Vaishampayan is a MarketWatch reporter based in New York. You can find her on Twitter @saumvaish.
