[1/3]A man uses a laptop under an electronic board with stock visualizations in a brokerage building in Tokyo, Japan, March 20, 2023. Portal/Androniki Christodoulou/File Photo ACQUIRE LICENSE RIGHTS
- Yield on 10-year government bonds stable at 4.72%
- The dollar is heading for a weekly record series
- All eyes will be on US payrolls at 12:30 GMT
SINGAPORE, Oct 6 (Portal) – The lull in bond sales stretched into Friday but may not last all day as investors await U.S. jobs data that could bolster the case for raising interest rates for some Time to keep up.
The shift from a rise to a fall in oil also provided relief: Brent crude futures were at $84.50 a barrel, about $13 or 13.5% cheaper than last week’s 11-month high.
MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) rose 0.9%. Tokyo’s Nikkei (.N225) was flat and currency markets remained similarly steady, although the fall in bond prices led the dollar to post a record 12th straight gain.
Ten-year U.S. Treasury yields fortunately remained steady at 4.72% during the Asian session, but rose 55 basis points in a five-week selloff that hit bond markets and risk appetite around the world.
“The recent sharp sell-off has the paradoxical power of laying the groundwork for its own reversal,” analysts at Rabobank said, as tighter financing conditions will weigh on demand and increase the likelihood that key interest rates will peak rather than pause.
However, no one was making big bets ahead of the release of US non-farm payrolls data at 12:30 GMT.
Economists polled by Portal expect 170,000 U.S. jobs (USNFAR=ECI) were added last month, although estimates are as high as 256,000.
“It’s hard to figure out where people are sitting, but the market certainly won’t want to see strong numbers,” said Jason Wong, strategist at BNZ in Wellington.
INTERLUDE
Another round of bond sales would likely propel the dollar further on its weekly winning streak, which is already its longest ever against the euro. The dollar index has risen for twelve consecutive weeks, matching an increase from July to October 2014.
Looking ahead, the euro is near its 11-month low at $1.0542 and the pound is not far from its seven-month low. The dollar index remained steady at 106.4 on Friday.
“A break above 107 would be technical evidence of trend continuation,” said Capital.com analyst Kyle Rodda.
Surprisingly, only the battered yen showed much of a fight, as a sudden rise in the Japanese currency during the London afternoon on Tuesday fueled speculation that authorities had intervened.
Japanese money market data showed no anomalies that could have been associated with intervention. But the move was noticeable enough to keep traders on guard.
The yen was recently stable at 148.5 per dollar. Gold was also steady at $1,822 an ounce after nine days of losses on rising global bond yields.
“This could just be a short pause while we wait for labor market data and next week’s U.S. Treasury supply and CPI data,” said SocGen strategist Kit Juckes.
“If the jobs data is strong, the pressure will return sooner than last year. I still believe the Treasury market will push yields higher until something in the system breaks down.”
Reporting by Tom Westbrook; Edited by Shri Navaratnam
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