US 10Y TREASURY: jobs and inflation data

Jobs data posted during the previous week surprised the markets in a negative way. It is sort of a paradox, considering that usually strong job market is good for the economy of any country. However, at the current situation, this strong jobs market sends a signal of a potential increase in inflation figures, which might impact the Fed's decision to cut interest rates during the course of this year. In addition, there should be noted a modest effect from new geopolitical tensions in the Middle East which impact jump in price of oil. The combination of these effects, made markets to reconsider their previously set projections, and re-position accordingly. In this sense, the 10Y Treasury yields made a significant move from levels around 4.2% all the way up to the level of 4.4% during the week.

In a week ahead data on US inflation rate in March are set to be released, which might drive some further volatility on the markets. Depending on data, if inflation is persistent then some further moves around 4.4% might be expected. On the opposite side, there should be some relaxation in yields, at least till the level of 4.3%.