U.S. Treasury yields stabilized on Friday after reversing Thursday’s sharp rise to multiyear highs, as elevated yields attracted investors to buy government bonds. The 10-year Treasury yield traded fairly flat at 5.239%, staying below a peak of 5.344% hit on Thursday, its highest since 2002, according to LSEG data. Treasurys began recovering on Thursday afternoon amid global risk-off sentiment, prompting investors to seek safe-haven assets like U.S. Treasury bonds and German Bunds, as noted by Deutsche Bank Research strategists.
This rally contrasted with underperformance in French and Italian government bonds due to fiscal and political concerns. On Thursday, the French government unveiled a budget proposal for 43 billion euros in cuts and cost savings, but it failed to reassure investors. Markets awaited U.S. non-farm payrolls data due at 1230 GMT for clues on future Federal Reserve interest rate moves.
Jefferies’ Mohit Kumar said a 'soft but not too soft' number would be ideal for markets. Federal Reserve Governor Philip Jefferson indicated the central bank might need more time to assess economic direction before adjusting policy, leading investors to cut October Fed rate hike expectations to just 26% from over 70% earlier in the week, per LSEG data.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing