Treasurys Steady Ahead of Jobs Report, Fed Meeting

12/07/17 11:58 AM EST
By Daniel Kruger 

U.S. government bonds held steady Thursday, as investors looked toward coming signals about the course of interest rates.

The yield on the benchmark 10-year U.S. Treasury note recently traded at 2.326%, according to Tradeweb, compared with 2.33% Wednesday. Bond yields rise when prices fall.

The pause came ahead of Friday's jobs report and next week's meeting of the Federal Reserve, where officials are expected to raise interest rates.

Central-bank officials have signaled that they will raise rates at their Dec. 13 meeting, where they will also release their forecasts for the economy and the path of interest-rate policy in coming years. Investors will be watching to see whether central bankers revise the forecast they issued at their September meeting for three interest-rate increases in 2018.

Many investors say they expect more Fed rate increases to fuel a continuation of the trend toward a flatter yield curve, where the gap between two- and 10-year yields narrows as shorter-term rates rise faster than those in the longer-term. Two-year Treasury yields, which are most responsive to expectations about Fed policy, have risen more than 0.6 percentage point this year, while 10-year yields have fallen.

"We're seeing accounts move from shorter-term securities to longer-term ones," said Thomas di Galoma, head of Treasury trading at Seaport Global Holdings. "The Fed has several more moves they want to make next year."

Write to Daniel Kruger at daniel.kruger@wsj.com

 

(END) Dow Jones Newswires

December 07, 2017 11:58 ET (16:58 GMT)

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