U.S. Treasury yields dipped on Friday morning, ahead of the release of the November jobs report.
The yield on the benchmark 10-year Treasury note fell by less than a basis point to 1.4444% at 4 a.m. ET. The yield on the 30-year Treasury bond also gave up less than a basis point at 1.7644%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
The U.S. Labor Department is due to release the November nonfarm payroll report at 8:30 a.m. ET. Investors expect to see solid jobs growth last month, with economists surveyed by Dow Jones predicting 581,000 jobs added in November.
A strong jobs reports would back up comments made by Federal Reserve Chairman Jerome Powell earlier this week, when he indicated that an improvement in the U.S. economy and higher inflation meant that the central bank could taper its asset purchases faster than expected.
Bill Street, chief investment officer at Quintet Private Bank, told CNBC’s “Squawk Box Europe” on Friday that he expected a strong nonfarm payrolls report.
In terms of the direction of monetary policy, Street said he expected interest rates to start rising next year. However, he argued that, given where they were pre-pandemic at the start of 2020, central banks were only really looking to normalize back to level.
“We’re not in that emergency room anymore from the economic perspective, so moving gently back into a place where you can have no more asset purchasing and then you can start looking at full employment and interest rates, traditional interest rates, is a reasonable expectation,” he said.
He said that it would probably take another two years to finish tapering and adjust policy, but added that “even when we get there, arguably that’s still a very, very relaxed interest rate environment.”
Other sets of jobs data this week have beaten expectations. On Thursday, the Labor Department reported that 222,000 jobless claims were filed last week, which was below estimates. Meanwhile, payroll services firm ADP reported on Wednesday that 534,000 jobs were added in November, which also beat forecasts.
In terms of other data due out on Friday, Markit is set to release its final purchasing managers’ index reading for November, at 9:45 a.m. ET. ISM’s non-manufacturing PMI for November is then expected to come out at 10 a.m. ET. October’s factory orders data is then slated to be released at 10 a.m. ET.
There are no auctions scheduled to be held on Friday.
— CNBC’s Hannah Miao contributed to this market report.
