Reply To: Bond Traders Weekly Outlook: Higher for Longer Threatens Long Duration Portfolios


Early Bonds Treasury yields jumped in response to the hot data. The 2-yr note yield, at 4.96% just before the 8:15 a.m. ET ADP release, is up 14 basis points to 5.08% now. The 10-yr note yield, at 3.97% before the ADP number, is up 11 basis points to 4.05% now.

According to ADP, private sector hiring increased by 497,000 in June (consensus 245,000) following a downwardly revised 267,000 (from 278,000) in May. Jobs in the goods-producing sector increased by 124,000 while jobs in the service-providing sector surged by 373,000. Small and medium businesses led the hiring, registering gains of 299,000 and 183,000, respectively, versus a decline of 8,000 positions at large establishments.

Separately, initial jobless claims for the week ending July 1 increased by 12,000 to 248,000 (consensus 245,000). Continuing jobless claims for the week ending June 24 decreased by 13,000 to 1.720 million.
The key takeaway from the report is much the same: initial jobless claims — a leading indicator — continue to run well below recession-like levels.

2-yr: +12 bps to 5.06%
3-yr: +14 bps to 4.76%
5-yr: +14 bps to 4.40%
10-yr: +9 bps to 4.04%
30-yr: +5 bps to 3.99%