Treasury yields slide ahead of July jobs report

U.S. Treasury yields were lower on Friday as investors looked ahead to the July jobs report and digested the interest rate outlook.

At 4:57 a.m. ET, the 10-year Treasury yield was down by over two basis points to 3.9529%, remaining below the 4% mark it fell beneath for the first time since February on Thursday. The yield on the 2-year Treasury was last around two basis points lower to 4.1450%.

Yields and prices have an inverted relationship. One basis point equals 0.01%.

The U.S. Labor Department’s jobs report for July is slated for Friday, and will provide investors with insights into the state of the U.S. economy.

A Dow Jones consensus estimate suggests nonfarm payrolls are expected to have increased by 185,000, which would be less than June’s reported gain of 206,000. The unemployment rate is expected to hold at 4.1%.

That comes after data released Thursday showed that the latest weekly initial jobless claims came in at 249,000, far above the forecast 235,000 and continuing claims rose to their highest level since November 2021.

Investors have also been weighing a slew of central bank actions. The Federal Reserve earlier in the week kept rates unchanged at their latest meeting but hinted that a September rate cut was on the table, sending Treasury yields lower.

Fed Chairman Jerome Powell said in a post-meeting press conference that policymakers believed the economy was getting closer to a point where rates cuts would be “appropriate,” and that a cut could come as soon as September.

Powell added that the central bank would monitor inflation and labor market signals, as well as weigh other indicators.

Elsewhere, the Bank of England on Thursday announced it was cutting interest rates for the first time in over four years.