`No Mojo' for Treasury Bears With Tariff Threats, Jobs Miss

(Bloomberg) -- The bears in the Treasuries market just can’t seem to catch a break.

Every time the stars appear to be aligned for government-debt yields to finally march higher, something comes along to reverse that momentum.

This time, a three-day streak of Treasuries losses that left yields poised to break out of their recent range was upended by a double-whammy: renewed trade-war fears and a disappointing March U.S. jobs report. Even hopes that an appearance by Federal Reserve Chairman Jerome Powell in Chicago might provide a catalyst for yields to advance didn’t pan out.

“There is no mojo” for bond bears, said Ward McCarthy, chief financial economist at Jefferies LLC. “Seems we are looking at another Q1 slowdown. The bigger issue is the stock market and the uncertainty that this tariff war is causing with gyrations in share prices and the possible future economic consequences.”

The 10-year U.S. yield retreated to 2.77 percent Friday following the release of weaker-than-forecast March labor data and comments from Powell. It had risen as high as 2.84 percent Thursday after rebounding from the 2.72 percent low it reached Monday.

Powell didn’t mentioned trade in his prepared remarks and in response to questioning afterward said the effects of tariffs weren’t yet quantifiable. The Fed Chair said the outlook on inflation and U.S. labor markets supported further gradual interest-rate increases.

©2018 Bloomberg L.P.

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