Yields fall as job openings shrink before Friday's jobs report
Updated at 1435 EDT
By Karen Brettell
NEW YORK, Sept 4 (Reuters) -Treasury yields fell on Wednesday, with interest rate sensitive two-year yields hitting a 15-month trough,after data showed U.S. job openings dropped to a 3-1/2-year low in July.
The closely watched yield curve between two-year and 10-year notes also turned positive for the first time since Aug. 5.
The Augustjobs report, due out on Friday, may helpthe Federal Reserve decide at itsSept. 17-18 meeting whether to cut interest ratesby 25 or 50 basis points.
"The big event of the week comes in the form of Friday's payrolls print," said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York.
"That's to a large extent going to give us the road map for what to expect from the Fed. The employment data is now overshadowing inflation as the biggest risk to near-term policy expectations."
Traders increased bets on a larger 50 basis points cut after Wednesday's jobs openings report. They are now pricing in a 43% chance of a 50 basis point rate reduction, up from 39% before the data, and a 57% chance of a 25 basis points cut, CME Group's FedWatch Tool showed.
Atlanta Fed President Raphael Bostic said on Wednesday the U.S. central bank must not keep interest rates too high much longer or it risks causing too much harm to employment.
The market may have overreacted to Wednesday's data, given that the economy is still showing solid growth, said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York.
"We don't really have a lot of information to suggest that a recession is imminent," Rajappa said. There is "nothing that would warrant the market pricing in such an aggressive path of rate cuts for the next year and a half."
Traders see 237 basis points of rate cuts likely by the end of 2025. FEDWATCH
Two-year note yields US2YT=RR were last down 10.5 basis points on the day at 3.783% after hitting 3.772%, the lowest since May 2023.
Benchmark 10-year note yields US10YT=RR fell 6.6 basis points to 3.778% after reaching 3.767%, the lowest since Aug. 20.
The yield curve between two- and 10-year Treasuries US2US10=TWEB was at minus 0.70 basis point after reaching positive 0.60 basis points. This shiftis a possible warning sign that a recession is approaching.
The 2/10 part of the yield curve has been mostly inverted since July 2022. It briefly turned positive on Aug. 5 before turning negative again.
The inversion, in which longer-dated yields are lower than shorter-dated ones, is typically viewed as foreshadowinga recession within the next 18 months to two years, though the current inversion has lasted longer than in previous episodes.
The curve typically turns positive before an economic downturn as investors price in expected rate cuts by the Fed.
Many analysts and economists, however, see the U.S. economy as likely to weakenbut avoid a recession.
Friday's employment report is expected to show 160,000 new jobs in August, according to the median estimate of economists' polled by Reuters. The unemployment rate is anticipated to have eased to 4.2% from 4.3% in July. USNFAR=ECI, USUNR=ECI
U.S. economic activityexpanded more slowly from mid-July through late August and businesses reported less hiring, the Fed's latest Beige Book showed.
Reporting by Karen Brettell; editing by Jonathan Oatis and Richard Chang
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.
