Treasuries gained, with 30-year debt leading advances, ahead of a key Labor Department report on U.S. employment.
The outperformance in 30-year bonds shrank the extra yield the maturity offers over two-year notes to near the smallest since January 2015. Yields on two-year notes, the maturity most sensitive to Federal Reserve policy expectations, were little changed.
Oil erasing gains after an earlier advance provided “modest support for Treasuries,” said Christopher Sullivan, who oversees $2.3 billion as chief investment officer at United Nations Federal Credit Union in New York.
The drop in longer-dated yields comes even as a bond-market gauge of inflation expectations known as the 10-year break-even rate climbed for a 10th day. Fed officials will meet March 15-16 to discuss whether the U.S. economy is strong enough to withstand tighter monetary policy. U.S. employers hired 195,000 workers in February, after adding 151,000 in January, based on a Bloomberg survey of economists before the government’s monthly employment report on Friday.
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Treasury 30-year bond yields fell three basis points, or 0.03 percentage point, to 2.66 percent as of 5 p.m. New York time, according to Bloomberg Bond Trader data. The price of the 2.5 percent security due in February 2046 rose 17/32, or $5.31 per $1,000 face amount, to 96 3/4.
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