(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)
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