Treasuries showed a notable move to the downside during trading on Friday, as traders reacted to a relatively upbeat U.S. jobs report.
Bond prices moved sharply lower in morning trading and remained stuck firmly in the red throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 9.9 basis points to 1.577 percent.
The weakness among treasuries came on the heels of the release of a report from the Labor Department showing stronger than expected job growth in the month of July.
The Labor Department said non-farm payroll employment increased by 163,000 jobs in July following a downwardly revised increase of 64,000 jobs in June. Economists had expected employment to increase by about 100,000 jobs.
Despite the stronger than expected job growth for the month, the unemployment rate edged up to 8.3 percent in July from 8.2 percent in June. The increase surprised economists, who had expected the unemployment rate to come in unchanged.
The unexpected drop by the unemployment rate came as the more volatile household survey showed that the number of employed persons fell by 195,000 in July, exceeding the decrease in the size of the labor force.
Peter Boockvar, managing director at Miller Tabak, said, "As measured by the payroll survey, the job creation in July was encouraging in light of the growing signs of economic slowdown but wasn't equally matched by the very volatile household survey which fell and was the main factor in the rise in the unemployment rate."
"In terms of impacting Fed policy, this data point will unlikely affect their desire to do more in September if the economy doesn't get any better from here," he added.
A separate report from the Institute for Supply Management showed a slightly faster rate of growth in the service sector, with the index of activity in the sector climbing to 52.6 in July from 52.1 in June.
Following the slew of closely watched U.S. economic data released over the past week, the economic calendar for next week is relatively light. Nonetheless, investors are likely to keep an eye on the release of reports on labor productivity, the U.S. trade balance, and import and export prices.
by RTT Staff Writer
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