Treasury yields flat ahead of jobless claims data

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U.S. Treasury yields were flat on Thursday morning, ahead of the release of weekly jobless claims data.

The yield on the benchmark 10-year Treasury note fell to 1.649% at 7:15 a.m. ET. The yield on the 30-year Treasury bond rose to 2.337%. Yields move inversely to prices.

Treasurys

Investors will likely be poring over the Labor Department’s latest update on jobless claims, due out at 8:30 a.m. ET, in light of last week’s blockbuster payroll report. Economists polled by Dow Jones expect first-time unemployment insurance claims to total 694,000 for the week ended April 3.

Yields have been rising recently over concerns about inflation, amid economic recovery from the coronavirus pandemic. However, the Federal Reserve indicated in its March policy meeting that it would let inflation run above its long-range target of 2%, if it helps achieve full employment.

Minutes from the Fed’s March meeting, released on Wednesday, confirmed that it would keep its accommodative policy in place until economic “outcomes” were achieved.

Sarah Hewin, head of research for Europe and Americas at Standard Chartered Bank, told CNBC’s “Squawk Box Europe” Thursday that it seemed as though the Fed had factored in some of the improvements seen in the economic data since that last meeting.

“So I think they, to a large extent, are factoring in some very hefty payroll numbers over the coming months,” she said, but added that the uncertainty was as to “how far the current strength in the economy persists.”

However, Hewin pointed to a study released by the New York Fed yesterday which highlighted that a lot of the recent stimulus checks were being put into savings, and to pay down debt, rather than being spent. She suggested it was “sensible” for the Fed to take a “cautious approach at this stage” to policy.

She added, “there’s still a huge output gap and from the Fed’s point of view, that output gap needs to be closed in order for inflation to get back to target, and indeed for it to stay above target for a while.”

Fed Chairman Jerome Powell is due to make a speech at the International Monetary Fund Debate on the Global Economy, at 12 p.m. ET on Thursday.

Auctions will be held Thursday for $40 billion of 4-week bills and $40 billion of 8-week bills.

CNBC’s Thomas Franck contributed to this report.

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