Traders work before the closing bell at the New York Stock Exchange on Aug. 14, 2019 in New York City.
JOHANNES EISELE | AFP | Getty Images
Treasury yields edged lower Friday as investors looked past a solid April jobs report and focused instead on the prospects for peace in the Middle East that would further ease energy prices and dim inflationary pressure in the economy.
The 10-year Treasury yield — the benchmark for mortgage lending, auto loans and credit card debt — fell more than 2 basis points, reaching 4.366%.
The yield on the 2-year Treasury note — which moves alongside expectations for short-term Federal Reserve interest rate policy — slipped more than 2 basis points to 3.895%. The longer-dated 30-year Treasury yield also shed more than 2 basis points, falling to 4.945%.
One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.
Yields remained lower after a better-than-expected payrolls report. Nonfarm payrolls rose by a seasonally adjusted115,000 in April, better than the 55,000 forecast by economists surveyed by Dow Jones. The unemployment rate held steady at 4.3%.
“More solid jobs data leaves the Fed where it’s been for a while — watching and waiting, focused on the inflation side of its mandate,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Rate cuts still aren’t on the near-term horizon, but the absence of inflationary threats in today’s report should quiet some of the chatter about a potential hike.”
Investors have grown hopeful this week that the U.S. and Iran will forge a peace agreement that would open the Strait of Hormuz and ease oil prices further. President Donald Trump said there was “no damage done to the three [U.S. Navy] Destroyers, but great damage done to the Iranian attackers.” The president also reportedly said that the ceasefire is still in effect, saying the strikes against Iranian targets were “just a love tap.”
West Texas Intermediate futures prices settled marginally higher on Friday at $95.42 per barrel, though the price of U.S. oil has dropped more than 6% this week.
On Thursday, new data from the Department of Labor showed weekly initial jobless claims stood at 200,000 for the week ended May 2, up 10,000 from the week before but below the 206,000 estimated by economists polled by Dow Jones.