Treasury yields retreat slightly ahead of key employment data

U.S. government debt prices were modestly higher Thursday as investors awaited critical employment data which could signal the pace of a potential economic recovery, while coronavirus cases continue to surge across the country.

At around 2:05 a.m. ET, the yield on the benchmark 10-year Treasury note was lower at 0.6742% and the yield on the 30-year Treasury bond was down slightly at 1.4252%.

June’s nonfarm payrolls data is due at 8:30 a.m. ET, with an increase of around 3 million jobs expected by analysts polled by Reuters. The closely-watched monthly indicator has proven difficult to call of late, with May’s surprise 2.5 million surge vastly outpacing a forecast decline of 8 million.

Last week’s jobless claims are also due at 8:30 a.m., with around 1.36 million unemployment filings expected after the previous week’s 1.48 million, along with the June unemployment rate and May’s balance of trade figures.

Treasury yields had received a boost Wednesday after a report showed private payrolls in the country grew by 2.369 million in June, shy of the 2.5 million expected from economists polled by Dow Jones.

Sentiment was also buoyed by news that a vaccine candidate being developed by Pfizer and BioNTech had created neutralizing antibodies in an early-stage human trial.

More governors of states most impacted by a fresh surge in coronavirus infections have reversed plans to reopen their economies, after the U.S. saw its second-highest daily rise in new cases to date on Wednesday, with California and Arizona setting records.

Auctions will be held Thursday for $45 billion of 4-week Treasury bills and $45 billion of 8-week bills.