US 10-year Treasury yield returns to 5.52% after weak jobs report

  • US 10-year Treasury yield rose to 5.52% after weaker employment data.
  • Nonfarm payrolls increased 29K, versus expectations for a 90K gain.
  • Markets removed expectations for a rate hike this month but retained December increase odds.

The US 10-year Treasury yield resumed its advance to 5.52% on Friday after dropping as much as 8 basis points earlier in the session. The weaker-than-expected employment report provided only temporary support for bonds: nonfarm payrolls increased by 29K last month, compared with expectations for a 90K gain, while the prior two months’ employment figures were revised lower. The data reduced expectations for a Fed rate increase this month, although traders continued to assign a high likelihood to a hike at the December meeting. Falling oil prices offered some relief on inflation, but the Middle East conflict remains unresolved. The benchmark yield had risen above 5.34% earlier in the week, reaching its highest level since 2002, amid expectations of further Fed tightening, uncertainty over the conflict, concerns about the US fiscal and debt outlook, and resilient economic data.

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