Treasury yields broadly fell on Friday after the October nonfarm payrolls report produced a lower-than-expected 150,000 new jobs.
What yields are doing
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The yield on the 2-year Treasury note
BX:TMUBMUSD02Y
was at 4.853%, down 12.2 basis points from 4.975% at 3 p.m. Eastern on Thursday. -
The 10-year Treasury note yield
BX:TMUBMUSD10Y
fell 17.7 basis points to 4.491% from 4.668% Thursday afternoon. It’s down more than 30 basis points this week and on track for its biggest weekly decline since November 2022. -
The yield on the 30-year Treasury bond
BX:TMUBMUSD30Y
declined 13.5 basis points to 4.685% from 4.82% late Thursday.
What’s driving the market
Data released on Friday showed that the U.S. added a modest 150,000 new jobs last month, below the 170,000 gain expected by economists polled by The Wall Street Journal. That’s down from a sharply revised 297,000 increase in September. Unemployment rose to 3.9% from 3.8%.
The report, along with Thursday data revealing a rise in initial U.S. jobless claims last week, indicates that the labor market may be softening. Fed funds futures traders factored in a 20.7% chance of a rate cut from the Federal Reserve by next March.
Long-term yields had started retreated on Tuesday, a day after the Treasury released a fourth-quarter financing estimate that came in below expectations. They pulled back further on Wednesday after Federal Reserve Chair Jerome Powell signaled interest-rate hikes may have run their course, and dropped again on Thursday.
What strategists say
“After years of incredible strength, the labor market could finally be slowing. The topline miss, plus downward revisions and higher unemployment, deliver a strong message to Jerome Powell and the Fed. Further tightening is now highly unlikely, and rate cuts could be back on the table next year,” said David Russell, global head of market strategy at TradeStation based in Plantation, Fla.
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