U.S. government debt rebounded Wednesday, pushing Treasury yields to their lowest level in seven months after investors digested weaker-than-expected reports on the U.S. labor market and services sector.
Yields on the more sensitive 2-year and 10-year government bonds fell 0.02 points to 3.31% and 3.79% respectively, moderating from early session gains.
Stocks fell on the session, with the blue chip S&P 500 down 0.2%. This is because investors seemed to shy away from growth stocks for more defensive sectors. Utilities rose 2.6%, healthcare rose 1.7% and consumer staples he rose 0.6%, while the tech sector fell 1.5%. The Nasdaq Composite fell 1.2%.
The move followed two soft economic reports that added signs that the US economy and labor market were losing momentum.
The US private sector created 145,000 jobs in March, 200,000 less than expected, according to payroll processor ADP. Another report from the Institute for Supply Management showed that the employment sub-index slowed last month as the large service sector cooled.
Earlier this week, the Labor Department announced that job openings in the United States fell to their lowest level in nearly two years in February.
Tight US labor markets, a key driver of high inflation, are showing signs of easing, according to the latest data.
Comerica Bank chief economist Bill Adams said, “The tightness in the labor market is easing. This is one of the conditions for the Fed to pause its rate-hiking campaign, but the Fed will not allow core inflation to slow further.” I also hope.”
Analysts look to Friday’s more influential non-farm payrolls numbers for further clarity. Investors now see the Fed likely to keep rates on hold at his next meeting in May.
“The labor market has held up in recent months,” said Andrew Hunter, deputy chief U.S. economist at Capital Economics.
US bank stocks also fell as investors became nervous about the aftermath of the recent banking crisis. His KBW Bank Index, which tracks 22 US banks, fell 0.5% after Tuesday’s loss, following the announcement by JP Morgan chief executive Jamie Dimon. warned The crisis is “not over yet” and its effects will continue “for years to come.”
“The epidemic has been contained so far, but I think the outlook for the end of monetary easing and the broader impact of higher interest rates is lacking,” said Emmanuel Cau, head of European equity strategy at Barclays. There may be parts.”
European stocks also fell on Wednesday. The Stox 600 across the region fell 0.2%, Germany’s Dax fell 0.5% and his CAC 40 in France fell 0.4%. His FTSE 100 in London was up 0.3%.
In Asia, the Hang Seng Index fell 0.7% and China’s CSI 300 rose 0.3%.
The Dollar Index, which measures the US dollar against a basket of six peer currencies, rose 0.3%. Gold was flat at 2020.26 oz, the highest since March 2022.
https://www.ft.com/content/4fa278bb-35e1-4bb5-aa8d-a10c2677a2ea U.S. Treasury yields drop to seven-month low on weak data