Market Pulse: 30 Year Yield Hits Post-Pandemic High


Earlier this week, Market Insights highlighted the improving story for the U.S. economy. The trend continued today as initial jobless claims fell more than expected to their lowest level since the end of November.

That triggered an interesting milestone: The 30-year Treasury yield index ($TYX.X) hit 19.51. That was slightly above the March 18 peak, and the highest reading since February 20, 2020 — a few days before the Covid selloff slammed markets. (Divide this index by 10 to get the 30-year yield.)

Other catalysts for today’s optimism include:

  • ADP private sector payrolls totaled 174,000 yesterday, more than triple the estimate.
  • Strong manufacturing and service data from the Institute for Supply Management.
  • Higher oil prices, which inflation lifts forecasts (and therefore bond yields).

Financials stand to benefit the most from the higher rates because it steepens the yield curve. Additionally, banks can profit from re-absorbing reserves set aside for bad loans. Don’t forget non-farm payrolls are due tomorrow morning.

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.