Treasuries held an advance from Thursday, paring losses incurred in a rout that wiped $519 billion off the global fixed-income market in the past eight days.
Benchmark 10-year yields had climbed to the highest this year on Thursday, mirroring an increase in yields on German bunds. The selloff halted in Treasuries even as economists estimated Friday’s jobs data will show the U.S. labor market is bouncing back, adding to speculation the Federal Reserve will raise interest rates this year.
“We will see a few days’ reversal of the losses,” said Birgit Figge, a fixed-income strategist at DZ Bank AG in Frankfurt. “The 10-year Treasury yield can go down further, but with a look at the past two weeks I expect further losses” in the securities, she said. “The nonfarm payroll data has to come in very high to change my view that the reversal might go on a few days.”
Benchmark Treasury 10-year yields fell less than one basis point, or 0.01 percentage point, to 2.18 percent at 7:10 a.m. New York time, according to Bloomberg Bond Trader prices. The yield dropped six basis points on Thursday after reaching 2.31 percent, the highest level since Dec. 8. The 2 percent note due February 2025 rose 2/32, or 63 cents per $1,000 face amount, to 98 15/32.
Germany’s 10-year bunds, the euro area’s benchmark sovereign securities, erased earlier gains to push yields up three basis points to 0.62 percent. The yield surged as much 19 basis points to 0.78 percent on Thursday, the highest since Dec. 8, as investors in Europe turned against all-time-low yields.
U.S. employers added 228,000 workers last month, according to a Bloomberg survey before the Labor Department releases the report Friday. In March, payrolls increased by 126,000. The measure is the brightest spot among recent mixed data after first quarter economic growth was less than analysts predicted.
The Fed will probably lift borrowing costs for the first since 2006 at its December meeting, according to a Morgan Stanley index.
Treasuries lost 1.7 percent in the past month through Thursday, outperforming their euro-area peers, which handed investors a 3.1 percent loss, according to Bloomberg World Bond Indexes.