U.S Treasury yields fell on Thursday, ceding more ground on Friday after labour market data showed weekly initial jobless claims rose more than expected last week while stocks on Wall Street sold off to sap risk appetite. New claims for unemployment benefits increased by 21,000 last week to a seasonally adjusted 211,000, the most in five months.
The jobless claims data comes ahead of Friday's payrolls report, which is expected to show an increase of 205,000 jobs in February after surging 517,000 in January, according to a Reuters survey of economists. A softening job market could calm the fears of an aggressive rate hike by the Federal Reserve in less than two weeks when the central bank's policy meeting is due. More so, after Fed Chair Jerome Powell's hawkish comments last week had opened the door to a 50 basis point interest (bps) rate hike.
The two-year yield dropped 30 basis points, while that of
the 10-year paper was down 13 bps since Wednesday's close. Fed
funds futures are now pricing 52% chance for a 50 bps hike in
March, down from 68% after Powell's comments. Meanwhile, the Reserve Bank of India (RBI) has raised the
repo rate by 250 bps to 6.50% this financial year and is likely
to increase it by 25 bps in April.
Retail inflation in India likely eased last month but stayed
above the RBI's upper threshold for a second straight month. A
Reuters poll of 43 economists predicted inflation at 6.35% in
February, down from 6.52% in January.
KEY INDICATORS:
** Brent crude futures contract was little changed at
$81.60 per barrel, after easing 1.3% in the previous session
** 10-year U.S. Treasury yield was at 3.8449% and
the two-year note at 4.7669%
** RBI to conduct 14-day variable rate repo auction for 1
trillion rupees ($12.18 billion)
($1 = 82.0770 Indian rupees)
(Reporting by Dharamraj Dhutia; Editing by Dhanya Ann Thoppil)
