TREASURIES-Investors disregard grim jobs report, again
(Updates with market activity) By Ross Kerber BOSTON, April 3 (Reuters) - U.S. Treasury yields held steady on Friday despite a grim federal jobs report, in a replay of a similar dynamic from the day before, as investors tried to grasp the full impact of the COVID-19 pandemic caused by the new coronavirus. The yield on the benchmark U.S. 10-year note was down 5.6 basis points at 0.5714% in afternoon trading. That was close to where it stood at 8:30 a.m. EDT (1230 GMT) when a closely watched U.S. Labor Department report showed the American economy shed 701,000 jobs in March. The figure signaled the abrupt end of a historic 113 straight months of employment growth as stringent measures to control the novel coronavirus outbreak shuttered businesses and factories, confirming a recession is under way. For Treasuries, the trading echoed that of Thursday when investors also disregarded a record rise in jobless claims to more than 6 million. Analysts said the muted market reaction to the dramatic jobs reports reinforced how investors are focused more on measures of public health and the effectiveness of government responses. "This is the smallest market impact I’ve ever seen from the payrolls number," said Justin Lederer, Treasury analyst for Cantor Fitzgerald. "This data doesn't mean that much, until we get a better picture of how the whole situation plays out," he said. Wall Street's main indexes fell on Friday. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at 36.7 basis points, less than a basis point lower than at Thursday's close. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 1.3 basis points at 0.2072% in afternoon trading. Since Wednesday, the figure several times dropped close to 0.20%, a level last reached in 2013, as analysts judge it unlikely the Fed will raise interest rates anytime soon. The 10-year note's yield was also within sight of its all-time low of 0.318% reached on March 9, and far below the levels near 2% seen at the start of the year. With bond yields so low, dividend-paying stocks are getting a fresh look from investors. April 3 Friday 2:02PM New York / 1802 GMT Price US T BONDS JUN0 182-29/32 1-12/32 10YR TNotes JUN0 139-72/256 0-100/25 6 Price Current Net Yield % Change (bps) Three-month bills 0.1 0.1017 0.006 Six-month bills 0.1475 0.1497 0.000 Two-year note 100-85/256 0.2072 -0.013 Three-year note 100-176/256 0.2651 -0.014 Five-year note 100-184/256 0.3544 -0.034 Seven-year note 100-242/256 0.4872 -0.049 10-year note 108-228/256 0.5714 -0.056 30-year bond 120-8/256 1.1998 -0.068 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 24.50 1.50 spread U.S. 3-year dollar swap 15.75 0.75 spread U.S. 5-year dollar swap 11.75 0.50 spread U.S. 10-year dollar swap 4.75 -0.25 spread U.S. 30-year dollar swap -43.25 -2.00 spread (Reporting by Ross Kerber; editing by Jonathan Oatis)
