The 10-year U.S. Treasury yield topped 1.61% early on Monday, as investors seem convinced that the Federal Reserve will soon look to taper its asset purchases, despite weaker employment data last week.
The yield on the benchmark 10-year Treasury note rose less than a basis point to 1.612% at 3:30 a.m. ET. The yield on the 30-year Treasury bond advanced by less than a basis point to 2.166%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
September’s jobs report, released Friday, showed that nonfarm payrolls rose by 194,000 last month. This was well below a forecast of 500,000 new payrolls in September.
The weaker jobs report, however, did little to assuage investor concerns that the Fed will soon look to pull back its bond buying program. Employment data is one indicator being used by the central bank to guide its timeline on tightening monetary policy.
In fact, the 10-year yield rose above the 1.6% following the release of the report, hitting its highest level since June 4.
Arnab Das, global market strategist at Invesco, told CNBC’s “Squawk Box Europe” on Monday that he believed the Fed would go ahead with tapering its asset purchases, though he said that weaker sets of data like the latest jobs report would sow some doubt as to how fast it would do so.
“I think the challenge here for the Fed, and others, is to normalize what has not been a normal economic cycle because of the pandemic and the lockdowns,” Das said.
There are no major economic data releases, or bonds auctions, scheduled for Monday.
Instead, investor attention this week will be focused on August’s Job Openings and Labor Turnover Survey, due out on Tuesday. Core inflation data for September and minutes from the Fed’s latest meeting are then set to come out on Wednesday.