10-Year Breaks Through 3%

Rates gap higher as 10-year Treasury yield closes above 3% for first time since 2018. Rates jumped higher across the curve today as the Treasury market continued its choppy ways. The 10-year has now climbed over 150bps since the start of the year, and over 100bps in the last two months alone. Market commentators offered up a bevy of explanations for the dramatic move, including upcoming Treasury auctions, selling in bond futures and corporate issuance hedging. Meanwhile, risk assets had a rough session. The Nasdaq Composite in particular ended the day over 5% lower to mark its biggest one day loss in years.

Jobless claims jump to a two-month high. Weekly claims increased to 200k from 181k last week but remain well below the record high of 6.137 million hit in April 2020. Continuing claims, which tracks the number of people receiving unemployment benefits, dropped by 19k to 1.384 million, the lowest reading since 1970. Tomorrow’s jobs report will likely reflect the tight labor market conditions, with economists forecasting a 380k jump in nonfarm payrolls and a 3.5% unemployment rate.

Jobs report due tomorrow. Nonfarm payrolls will be released tomorrow, forecasts calling for a 380,000 increase in jobs. The unemployment rate is expected to tick lower to 3.5%, but the real wildcard could be average hourly earnings which are expected to increase by 5.5% (yoy).