Bond markets react to Jobs Friday and other employment data
The Treasury yield curve for five-year to 30-year maturities edged down slightly in the week ending November 7. Stock markets (DIA) (SPY) (QQQ) read a bullish slant to October’s employment report released on Friday, November 7 (refer to the previous section) with record highs in the S&P 500 Index (IVV) and the Dow Jones Industrial Average (DIA) on Friday.
But bond markets (BND) (TLT) didn’t judge the data to be upbeat enough for the Fed to bring forward its schedule for rates increases. The benchmark ten-year Treasury (or UST) (IEF) yields and 30-year Treasury yields fell by seven and five basis points, respectively, on Friday, November 7. Dialed-down expectations for an increase in the Federal funds rate caused Treasury yields between two-year and 30-year maturities to decline on Friday.
Treasury ETFs see positive returns
The Treasury yield curve for five-year to 30-year maturities moved lower in the week ending November 7. This was primarily due to a relatively disappointing employment report (Part 7) for October. The benchmark ten-year Treasury (IEF) yields as well as 30-year Treasury yields both fell by three basis points over the week ended November 7. Ten-year Treasuries were yielding 2.32% on Friday, while 30-year (TLT) Treasuries yielded 3.04%.
This benefited the prices of exchange-traded funds (or ETFs) such as the iShares 20+ Year Treasury Bond ETF (TLT), the iShares 7-10 Year Treasury Bond ETF (IEF), and the ProShares Ultra 7-10 Year Treasury ETF (UST), which rose by 0.7%, 0.3%, and 0.6%, respectively, over the week.
The next section will cover secondary market trends in the high-quality corporate bonds segment.