Thursday, June 4, 2015

Treasuries Remain Lower as U.S. Job Gains in May Meet Forecast

Treasuries remained lower after a private report showed the U.S. jobs gains in May met economist forecasts, amid speculation the Federal Reserve is more data-dependent than ever in its quest to raise interest rates.

The yield on the benchmark 10-year note traded close to the highest level in two weeks before a separate report June 5 forecast to show the U.S. jobs market remains strong.

“It sets up for a largely on-target number Friday,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, which manages $61 billion in assets.

“By most measures we’ll be back to full employment by the third quarter of this year and for the employment side of their mandate, that gives the Fed cover to raise rates as long as inflation plays ball.”

Benchmark U.S. Treasury 10-year yields rose two basis points, or 0.02 percentage point, to 2.28 percent as of 8:26 a.m. New York time, according to Bloomberg Bond Trader data.

 They have climbed from this year’s low of 1.64 percent set in January. The 2.125 percent note due in May 2025 fell 5/32, or $1.56 per $1,000 face amount, to 98 20/32.

Companies last month added 201,000 workers, according to figures Wednesday from the Roseland, New Jersey-based ADP Research Institute.

bloomberg.com

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