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The US 10-year yield rose four basis points to 1.12% on Friday even though the US Nonfarm Payrolls data showed the economy shed 140,000 jobs in December. The benchmark yield’s resilience is a sign of bond markets pricing US fiscal risk, according to Robin Brooks, Chief Economist at the Institute of International Finance (IIF).

“The rising 10-year yield isn’t about payrolls being better “under the hood,” but about an emerging fiscal risk premium for the US,” Brooks tweeted on Friday. 

The yield rose by 20 basis points last week, putting a bid under the oversold US dollar. While the 10-year yield is currently seen at 1.114%, the dollar index, which tracks the greenback’s value against majors, is hovering at over two-week highs near 90.40.