NEW YORK — Yields of short-term U.S.
Treasuries fell from multi-year highs Friday after a closely
watched employment report showed unemployment rising and job
growth slowing in August.
Non-farm payrolls increased by 315,000 jobs last month, down
from a surging 526,000 in July, the Labor Department said. The
unemployment rate increased to 3.7% from a pre-pandemic low of
3.5% in July.
Economists polled by Reuters had forecast payrolls
increasing 300,000. Estimates ranged from as low as 75,000 to as
high as 450,000.
The jobs data comes a week after Federal Reserve Chair
Jerome Powell said that the U.S. economy may face a painful
period of slow economic growth and rising unemployment as the
central bank continues an aggressive pace of interest rate hikes
to curtail inflation, which is running near 40-year highs.
The two-year U.S. Treasury yield, which typically
moves in step with interest rate expectations, was down 4 basis
points at 3.482% after hitting 15-year highs the day before.
The yield on 10-year Treasury notes was up 1.7
basis points to 3.282%, one day after hitting two-month intraday
highs, while the yield on the 30-year Treasury bond
was up 3 basis points to 3.404%.
Bond yields rise as bond prices fall.
“The basic message is the labor market might be starting to
cool and the Fed might not have to move so aggressively,” said
David Page, head of macroeconomic research at Axa Investment
A closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes, seen as an indicator of economic
expectations, was at -20.8 basis points.
September 2 Friday 8:47AM New York / 1247 GMT
Price Curr Net
Three-month bills 2.8775 2.93 -0.016
Six-month bills 3.3125 3.41 0.041
Two-year note 99-140/256 3.48 -0.034
Three-year note 98-226/256 3.52 -0.021
Five-year note 98-196/256 3.39 -0.014
Seven-year note 98-116/256 3.37 0.002
10-year note 95-136/256 3.28 0.015
20-year bond 95-208/256 3.67 0.023
30-year bond 92-112/256 3.40 0.031
DOLLAR SWAP SPREADS
Last (bps) Net
U.S. 2-year dollar swap 36.00
U.S. 3-year dollar swap 13.75
U.S. 5-year dollar swap 7.00
U.S. 10-year dollar swap 8.75
U.S. 30-year dollar swap -30.25 -1.
(Reporting by David Randall; Editing by Andrea Ricci)