10-year Treasury yield trades near 4.3% before Friday’s jobs report

U.S. Treasury yields inched higher as traders parsed the latest economic data in the runup to Friday’s all-important jobs report.

The 10-year Treasury yield was just over 2 basis point higher at 4.286%. The 2-year Treasury yield added more than 1 basis point to 4.172%.

Yields and prices move in opposite directions. One basis point is equivalent to 0.01%.

The personal consumption expenditures price index climbed 2.1% in September from the same month a year prior. That’s in line with the consensus forecast of economists polled by Dow Jones and close to the goal of 2% annualized inflation set by monetary policymakers.

The key inflation gauge rose 0.2% month over month, also in line with expectations.

Weekly jobless claims, meanwhile, came in under where economists polled by Dow Jones had anticipated. That can bolster expectations for continued strength in the labor market.

These releases come as investors await data on nonfarm payrolls, the unemployment rate and hourly wages due Friday. It’s the last so-called jobs day before the U.S. presidential election and next Federal Reserve policy meeting, which are both scheduled for next week.

“The October monthly employment report is supposed to slow with the Boeing strike and a couple of hurricanes expected to depress job creation,” said Christopher Rupkey, chief economist at FWDBONDS. “But the timeliest of economic indicators, the weekly unemployment claims data, suggest the economy is weathering the storms and companies are not doing any serious belt-tightening and laying off workers because they sense a downturn is coming.”

Fed funds futures are currently pricing in a likelihood of more than 96% that the central bank delivers a quarter-point rate cut, according to CME Group’s FedWatch Tool.

The Fed enacted its first interest rate cut since the early days of the Covid-19 pandemic when it slashed half a percentage point off benchmark rates in September.

Policymakers are currently in a so-called blackout period ahead of the Nov. 6-7 meeting, which means they will not be delivering remarks off the back of the data releases, or about their general policy and economic expectations.