On Friday, markets will get the August employment report and investors are looking ahead to the Federal Reserve policy meeting later this month. [With Fed Meeting Looming, Sep-Taper Fears Rise]
The two-year high in Treasury yields “is just a growing confidence on the part of the bond market that a Sept. 18 tapering announcement is coming,” said Adrian Miller, director of fixed-income strategies at GMP Securities, in a Bloomberg report. “That thesis has been supported by the ADP, which is good enough, despite the miss and the jobless claims that bested estimates.”
“We’ve had a strong move to the upside” in yields, added Karsten Linowsky, a fixed-income strategist at Credit Suisse Group. “Everyone is waiting for these events, like the payrolls and the Fed meeting, and that’s why we’ve seen pressure to the upside in yields.”
iShares 7-10 Year Treasury Bond
Full disclosure: Tom Lydon’s clients own TLT.