The 10-year Treasury yield touched 5.33% Thursday, its highest level since 2002. Then buyers stepped in.
It closed at 5.237%, down 5.6 basis points. This morning's jobs report starts from a 10-basis-point round trip off a 24-year high.
The morning push had a clear trigger. ISM's September prices-paid index jumped 6.8 points to 77.9, its highest since the Iran war began.
Jobless claims also came in low, at 197,000 against a 200,000 consensus (Investrade). The Sept. 30 close of 5.293% is now the level today's payrolls will test.
WTI crude rose 2.7% to $92.87 and Brent settled at $102.31. Market Scholars linked the jump to Chinese fuel-export limits and reports out of the Middle East.
Oil feeds straight into the price pressure ISM measured. Crude rising on the same day yields reversed means the inflation pressure did not go away, even though the bond market's reaction faded.
The S&P 500 gained 0.19% to 7,666.45, and the Dow added 0.04% to 50,926.56 (Market Scholars). On the surface the tape looked calm, but underneath it did not.
NYSE new lows rose to 393 from 301, against just 15 new highs. If strong jobs data restarts the climb in yields, it will hit a market whose breadth is already thin.
Short rates moved less. The 2-year yield sat near 4.81%, leaving the 10-year about 43 basis points above it.
Pricing shows about one more quarter-point hike by December, according to XTB. With long yields leading and front-end pricing steady, the moves fit worries about inflation and supply better than a new Fed path.
Payrolls arrive at 8:30 a.m. ET. Bloomberg's survey expects 90,000 jobs after August's 162,000, with unemployment holding at 4.1%.
Average hourly earnings are seen rising 0.3% for the month. Coming after a 77.9 prices-paid reading, a hot wage number would test whether Thursday's reversal holds.
August factory orders follow at 10 a.m., with 0.2% expected after 0.9% (XTB). Dallas Fed President Lorie Logan also speaks this morning, giving the first Fed voice on the jobs data.
