Market Pulse: Treasury Yields Edge Higher Amid Mixed Jobs Data
As the holiday season comes to a close, the financial markets are gearing up for a busy year ahead. On Friday, Treasury yields saw a slight uptick following a mixed bag of data on weekly jobless claims.
Jobless Claims: A Tale of Two Indicators
The latest numbers from the Labor Department showed that initial jobless claims for the week ending December 21 came in 1,000 lower than expected, at 219,000. This marks a welcome decline from the previous week’s figures. However, the news wasn’t all rosy, as continuing claims rose by 46,000 to reach their highest level since November 2021.
Treasury Yields React
In response to the mixed data, the yield on the 10-year Treasury note ticked up 3 basis points to 4.607%, hovering just above the 4.6% mark it breached earlier in the week. The 2-year Treasury yield also saw a fractional increase, reaching 4.334%. As yields move inversely to prices, this means that bond prices took a slight hit.
Federal Reserve Watch
The recent surge in Treasury yields – over 40 basis points in December alone – suggests that traders are bracing for a more hawkish Federal Reserve in 2025. With the central bank’s next meeting scheduled for the end of January, market participants are expecting a rate hold. However, the Fed’s future moves will be closely watched, as they could have significant implications for the economy.
Economic Data Ahead
Looking ahead, investors will be keeping a close eye on the monthly wholesale inventories data, set to be released later on Friday. This will provide further insight into the state of the economy and could influence market sentiment.
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