CASH-Yields fall, curve flattens after May jobs report

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(Redesigns; updates yields, adds analyst comments) By Karen Pierog CHICAGO, June 4 (Reuters) – U.S. Treasury yields fell and the yield curve flattened on Friday after gains in Jobs in May fell short of expectations, calming fears that a roaring economy could lead to faster monetary policy tightening. The benchmark 10-year yield, which experienced its largest basis point decline since April 15, fell to its lowest level since May 26 at 1.557%. It was down 6.8 basis points to 1.5585%. The 30-year yield slipped to 2.233% and lost 6.1 basis points for the last time to 2.2341%. The closely watched yield curve between two- and ten-year Treasuries flattened, with the yield spread at its lowest since May 26. It was 5.71 basis points flatter at 140.78 basis points. The US Department of Labor reported that the non-farm payroll increased last month by 559,000 jobs, which was lower than the 650,000 job gains that economists polled by Reuters had predicted. April’s data has been revised slightly upwards to show that the payroll is increasing by 278,000 jobs instead of 266,000 as previously reported. The unemployment rate fell to 5.8% from 6.1% in April. “The numbers were decent, but they weren’t explosive numbers,” said Andrew Richman, senior fixed income strategist at Sterling Capital Management, highlighting the possibility of a huge job gain after the national report on Thursday’s ADP Jobs showed that the private payroll had 978,000 jobs in May. Gennadiy Goldberg, an interest rate strategist at TD Securities in New York, said the government’s jobs report was “not good enough” to change the outlook for the US Federal Reserve to reduce its purchases of ‘bonds or raise rates, which should keep rates relatively within a range. short term bound. Meanwhile, the amount of money flowing into the Fed’s repo facility rose from $ 479 billion on Thursday to $ 483 billion on Friday, just under a record $ 485 billion hit on the 27th. may. An influx of liquidity lowers short-term rates and fuels expectations. the Fed will take action to maintain its key rate. Looking ahead to next week, the Treasury Department will hold auctions for $ 58 billion in three-year bonds on Tuesday, $ 38 billion in 10-year bonds on Wednesday and $ 24 billion in 30-year bonds. Thursday. “Overall, I think things will be decent, but if rates continue to fall here, it will be just a little harder for that to happen,” Richman said. The two-year Treasury yield fell almost a basis point to 0.1507%. The yield on inflation-protected 30-year Treasury securities closed at -0.077%, its lowest closing point since mid-February, according to Tradeweb. June 4 Friday 4:22 p.m. New York / 2022 GMT Price Current net yield% Change (bp) Three-month bills 0.0225 0.0228 0.003 Six-month bills 0.04 0.0406 0.003 Two-year bill 99-243 / 256 0 , 1507 -0.009 Three-year bond 99-216 / 256 0.3034 -0.027 Five-year bond 99-216 / 256 0.782 -0.063 Seven-year bond 100 -36 / 256 1.2289 -0.070 10-year bond 100- 156/256 1.5585 -0.068 20-year bond 101- 152/256 2.512 -0.067 30-year bond 103-16 / 256 2.2341 -0.061 SPREADS DOLLAR SWAP Last (bps) Net change (bps) 2-year US dollar swap 7.25 -0.50 3-year US dollar swap spread 11.50 0.00 5-year US dollar swap spread 7.25 -0.25 10-year US dollar swap spread -3.25 -0.25 30-year US dollar spread swap -29.00 spread 0.00 (Report by Karen Pierog in Chicago Additional report by Karen Brettell in New York Edit by Alden Bentley and Matthieu Lewis)



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