Treasury yields ended higher on Monday, after data showed record U.S. job openings for June and pointed to strength in the labor market, despite lingering concerns about the spread of the delta variant.

What yields are doing

The 10-year Treasury note yield
TMUBMUSD10Y,
1.326%

traded at 1.316%, compared with 1.288% on Friday at 3 p.m. Eastern Time. On Friday, the 10-year had its biggest one-week gain in yield since June 25. Yields on debt fall as prices rise.

The 30-year Treasury rate
TMUBMUSD30Y,
1.975%

was at 1.962%, versus 1.933% to end last week.

The 2-year Treasury note
TMUBMUSD02Y,
0.212%

was at 0.220%, versus 0.208% on Friday.

What’s driving the market?

U.S. job openings rose to a record 10.1 million in June from a revised 9.5 million in the prior month, the Labor Department said Monday. That’s the fourth straight all-time monthly high, and beat economists’ estimates. The report reflects high demand for workers, making it a job-seeker’s market and implies that wages may also drift higher, adding to talk about rising inflation amid the recovery from the COVID pandemic.

Monday’s moves followed a monthly reading on employment from the Labor Department Friday, which helped drive bond rates higher. That report showed that the U.S. created 943,000 jobs in July, which was the biggest jobs gain in nearly a year and a sign that the economy’s rebound might not be impeded by the delta strain of the coronavirus that causes COVID-19.

In other developments on Monday, Reuters reported that two Federal Reserve officials — Atlanta Fed President Raphael Bostic and Richmond Fed President Tom Barkin — said that the economy is growing rapidly and that inflation is already at a level that could satisfy one leg of a key test for the beginning of rate hikes.

Later this week, auctions of 3-year
TMUBMUSD03Y,
0.431%

and 10-year notes, as well as the 30-year bond, could provide insights on investor appetite for U.S. government debt.

What analysts are saying

“U.S. businesses continue to ramp up hiring in an effort to reopen and return to full capacity in order to meet consumers’ solid demand,” Lindsey M. Piegza, chief economist at Stifel, wrote in a note. “While some fear an impact from the delta variant going forward, at least for now, businesses do not appear to be deterred from continuing to add employees and at least attempt to return to `normal.’ ”

A “real and broadening” restart of the global economy is under way — with the U.S. “passing the baton” to Europe and other developed markets, even as COVID-19’s delta variant presents a challenge for emerging countries, according to the research arm of BlackRock Inc., the world’s largest money manager. For now, the global-restart scenario “supports our pro-risk stance and our underweight in government bonds as we believe their low yields don’t reflect the restart’s momentum,” Jean Bolvin, Elga Bartsch, Wei Li, and Nicholas Fawcett of the BlackRock Investment Institute said in a note

“Treasury supply coming this week in [3-year, 10-year and 30-year] maturities which should cheapen the yield curve a bit more over the coming days,” wrote Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities, in a Monday research note. “That said, we do prefer buying dips looking for lower yields in August due to delta variant and the possibility of U.S. slower growth as a result,” the analyst wrote.

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