Investors who’ve been hedging against a deeper selloff in US Treasuries are preparing for volatility as Friday’s hurricane- and strike-tinged US employment report offers final clues ahead of next week’s Federal Reserve policy decision.
US bonds edged higher in early trading Friday after ending October with their worst monthly performance in two years. With the election and a Fed meeting days away, a measure of daily yield swings is at its highest in a year as traders position for further losses that could send 10-year yields as high as 4.5% over the next three weeks – compared with just under 4.3% currently.
That positioning makes evidence of a robust US labour market in government data released on Friday “hard for the market to ignore,” said Jack McIntyre, portfolio manager at Brandywine Global Investment Management. While money managers can explain away weak data as a byproduct of strikes and storms, a strong jobs report would…
