The stronger US jobs data has US yields moving sharply to the upside once again:

  • 2 year yield 5.110%, +8.6 basis points
  • 5 year yield 4.808% +12.5 basis points
  • 10 year yield 4.86% +14.5 basis points
  • 30 year yield 5.03% +14.4 basis points

The high yield for the 10 today reached 4.887% which was just above the high from Tuesday’s trade of 4.884%.. That takes the yield to the highest level since July 2007 and closer to the 5% level. Looking at the monthly chart below, there is a swing area going back to 1993 – 2007 area where the yield fluctuated above and below 4.88% and 5.52%. Should the 10 year yield head up toward the 5.5% level, that would probably turn the yield curve positive (2 – 10 year spread). I would not be surprised.

10 year yield

Currently, the 2-10 year spread is down to -25.6 basis points (it was as negative as -109 basis points this year). The negative spread is the smallest since October 2022 as the market chips away at the negative yield curve. Only 25 basis points to a flat yield curve. Should the 10-year yield spike up toward the 5.5% level, that yield curve could un-invert and move positive.


US 2 – 10 year yield spread


The premarket for US stocks or implying a lower opening (but off the lowest premarket levels post the US jobs report):

  • S&P index is down -27 points
  • Dow industrial average down -124 points
  • NASDAQ index is forecasting a tumble of -120 points

The NASDAQ index closed yesterday unchanged for the week. It’s looking like a down week now.

Fundamentally, things are still out of whack as a result of the pandemic. I blame the last stimulus spending for this employment situation. Looking down our street, their ripping up the curbs and putting in new ramps where there were ramps. Streets all around town are being repaved. Money is being spent because it’s there and it is taking workers away from housing where there is a shortage. People can’t find workers.



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