The 10-year note yield, which falls as prices rise, was down 1 basis point on the day at 2.795%, despite bouncing around in morning trade, according to Trade web. The benchmark 10-year yield had risen for each of the previous four days.The 30-year bond yield fell 1.5 basis point to 3.632%, and the 5-year note yield was down a basis point at 1.786%.
A gauge of service-sector and non-manufacturing strength rose to 53.1% in March from 51.6% in February, according to data from the Institute for Supply Management. Economists polled by MarketWatch expected a reading of 53.3%, but a number over 50% indicates expansion among companies. One of the biggest gainers in the index was the employment subcomponent.
The number of people who applied for unemployment benefits rose by 16,000 last week to 326,000, the highest in a month, according to Labor Department data. Economists polled by MarketWatch had expected the gauge of layoffs to rise to 320,000 from the previous week’s revised level of 310,000. Nonetheless, jobless claims remain near post-recession lows.
The trade deficit also climbed by 7.7% in February to $42.3 billion, a five-month high. The deficit, which was higher than economist forecasts of $39.1 billion, was largely due to lower exports, such as aircraft and petroleum.
The data comes as the market largely focuses on Friday’s nonfarm payrolls report, which many investors expect to show substantial new jobs created as the economy recovers from an especially cold winter that dampened activity. MarketWatch-polled economists expect 200,000 new jobs created in March, up from 175,000 in February, but the whisper number among Wall Street trading desks has been even higher.
“We suspect there is a fair amount of pent-up hiring released in March after being depressed during the December to February time frame. Hence we are looking for a gain in jobs of 250,000,” said Adrian Miller, director of fixed-income strategy at GMP Securities LLC, in a note.
The European Central Bank said Thursday that it would keep its key lending rates unchanged after its latest meeting Thursday, but ECB President Mario Draghi didn’t rule out further monetary easing , if needed. Draghi introduced the topic of quantitative easing as well as mentioned negative deposit rates .
The 10-year German bund yield slipped a basis point on the day to 1.608%. The difference in yield between the 10-year bund and the 10-year Treasury was near its largest point since 2006 amid a divergence in the monetary policies in Europe in the U.S.