Traders are rushing into the safety of US Treasurys after nonfarm payrolls increased by just 36,000 in May, missing the Wall Street consensus of 160,000 by a wide margin.
Heavy buying at the front end of the curve has pushed the 2-year yield down 10 basis points to 79 bps. This is the lowest the yield has been in more than two weeks.
Longer dated yields are seeing less of an impact. The 10-year yield is lower by six basis points at 1.74%, and is nearing the February low near 1.66%. A move below that level would be the lowest print since 2012.
Friday’s buying has caused the yield curve to steepen as yields up front are falling faster than those further out along the curve. The spread between the 2-year yield and 10-year yield is wider at 94.5 bps, but remains near its tightest levels since 2007.