Why Good Friday could turn into Friday the 13th for the world’s biggest bond market

The most dangerous time for the Treasury market comes tomorrow when fresh jobs data could trigger the biggest selloff in weeks.

The most dangerous time for the Treasury market this month will be when the U.S. issues employment data on Friday, if February and March are any guide.

Benchmark 10-year yields jumped 14 basis points on Feb. 6 and 13 basis points on March 6, once the last two reports fuelled bets the economy was getting strong enough to withstand higher interest rates. With yields moving inversely to prices, those dates mark the steepest declines in the world\’s biggest bond market during the past eight weeks.

There\’s a chance of another selloff before traders head home in the shortened Good Friday session, according to Hiroki Shimazu at SMBC Nikko Securities Inc. in Tokyo. Wages, a barometer of inflation, is going to be key, he said.

\”There are indications of a tightening in the labor market,\” said Shimazu, SMBC Nikko\’s Tokyo-based senior market economist. \”A stronger rise in wages will trigger a rise in Treasury yields.\”

Related

Categories: Economy

Tags: ,,,,

Leave A Reply

Your email address will not be published.