Treasury returns mixed with employment in brief reports


US Treasury yields were mixed on Tuesday morning, with investors focusing on the jobs reports due later this week.

The benchmark 10-year Treasury bill yield rose less than a basis point, to 1.484%, at 4 a.m. ET. The yield on 30-year Treasury bills fell by less than a basis point to 2.044%. Yields move in the opposite direction of prices and 1 basis point equals 0.01%.

ADP’s September job changes report is due for release Wednesday at 8:15 am ET and the highly anticipated non-farm payroll report for last month is expected to be released at 8:30 am ET Friday.

Jobs data, along with inflation readings, are used by the Federal Reserve to track the economic recovery from the coronavirus pandemic and to assess when it can begin to reverse emergency stimulus, to begin with. by reducing asset purchases. The Fed said at its September meeting that it would look to withdraw its bond purchases soon.

Expectations of an impending decline in asset purchases, as well as concerns about lingering inflation, pushed Treasury yields higher. The 10-year Treasury yield surpassed 1.56% last week, its highest level since June.

David Miller, director of investments at Quilter Cheviot, told CNBC’s “Squawk Box Europe” on Tuesday that the Fed was one of the big central banks that had the “luxury of stepping back” and would be able to maintain that Inflationary pressures are transient for “a little longer.”

“And to be honest, I think the Fed’s top priority will remain growth no matter what, even if it means a little more inflation,” Miller said.

In terms of data coming out Tuesday, the final reading of the Markit Purchasing Managers Index for September is expected at 9.45am ET, followed by ISM’s non-manufacturing PMI for September at 10am ET.

The IBD / TIPP Economic Optimism Index is also expected to be released at 10 a.m. ET.

Meanwhile, Fed vice chairman for oversight Randal Quarles is scheduled to deliver a speech on Libor transition at the Structured Finance Association conference at 1:15 p.m. ET.

Investors will also keep an eye on progress in dealing with the impending default in Washington. Lawmakers have until Oct. 18 to raise or suspend the U.S. borrowing limit, to avoid the very first national debt default.

Auctions are scheduled for Tuesday for $ 34 billion in 52-week bills and $ 25 billion in eight-day bills.

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