Treasury 10 and 30 year yields increased to their highest level since April after the release of reports on payrolls, consumer confidence and manufacturing indicated that the economic recovery of the nation is getting some momentum. Long term yields increased for the second week after the Labor Department said the economy added 200,000 jobs on average in the past three months. Consumer confidence also increased in January. The Federal Reserve will buy $9.25 billion to $12.25 billion of securities next week as part of its stimulus plan.
Treasury 10 year note yields went up on the week seven basis points to 2.02 percent. They reached 2.04 percent, which is the highest since April 13 of last year. The price of the 1.625 percent security due in November 2022 fell 18/32 to 96 17/32.
The yield on 30 year bonds reached 3.24 percent, which is the highest since April 5. Break-even rates on the 30 year inflation-protected securities, which is how much investors estimate consumer prices will increase over the life of the securities, reached the highest level since September.
The Thomson Reuters/University of Michigan index of consumer sentiment went up to 73.8 in January from 72.9 in December. The gauge was estimated to fall to 71.5 according to the average forecast of 62 economists polled by Bloomberg. The initial reading was 71.3.
The Institute for Supply Management’s manufacturing index increased to 53.1 in January from 50.2 in December. Readings above 50 show expansion. The reading was above the highest estimate in a Bloomberg poll of 86 economists. The average forecast was 50.7.
US employers added 157,000 jobs in January after a modified 196,000 advance in December and a 247,000 surge in November. January’s increase was less than the estimated average of 165,000 according to the poll of 90 economists made by Bloomberg.
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