Treasuries Moved Notably Lower On Better Than Expected Jobs Data

Extending the downward move seen over the two previous sessions, treasuries moved notably lower during trading on Friday.


Bond prices came under pressure early in the session and remained firmly negative throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.5 basis points to 1.842 percent.


The continued weakness among treasuries came following the release of a closely watched Labor Department report showing much stronger than expected U.S. job growth in the month of November.


The report said non-farm payroll employment surged up by 266,000 jobs in November after climbing by an upwardly revised 156,000 jobs in October.


Economists had expected an increase of about 180,000 jobs compared to the addition of 128,000 jobs originally reported for the previous month.


The Labor Department said notable job gains occurred in healthcare and in professional and technical services, while manufacturing employment also rose as General Motors (GM) workers returned from a strike.


With the stronger than expected job growth, the unemployment rate edged down to 3.5 percent in November from 3.6 percent in October. The unemployment rate was expected to remain unchanged.


A separate report released by the University of Michigan showed a much bigger than expected improvement in U.S. consumer sentiment in the month of December.


The report said the consumer sentiment index climbed to 99.2 in December from the final November reading of 96.8. Economists had expected the index to inch up to 97.0.


With the much bigger than expected increase, the consumer sentiment index reached its highest level since hitting 100.0 in May.


Surveys of Consumers chief economist Richard Curtin said nearly all of the improvement in consumer sentiment in December was among upper income households, who reported near record gains in household wealth due to record high stock prices.


The Federal Reserve may move back into the spotlight next week, although the central bank is widely expected to leave interest rates unchanged at its monetary policy meeting.


Investors are also likely to keep an eye on any news of the trade front as well as reports on retail sales, consumer and producer prices, and import and export prices.


Bond trading could also be impacted by reaction to the results of the Treasury Department's auctions of three-year and ten-year notes and thirty-year bonds.




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