Following the notable rebound seen in the previous session, treasuries continued to regain ground during trading on Friday.
Bond prices showed a strong move to the upside in early trading but gave back some ground going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.4 basis points to 2.15 percent.
With the decrease, the ten-year yield added to the 5.6 basis point loss posted on Thursday, pulling back further off the two-month closing high set on Wednesday.
The continued strength among treasuries came following the release of the Labor Department’s highly anticipated monthly jobs report from April.
The jobs data was seen as solid but not strong enough to put a June interest rate hike by the Federal Reserve back on the table.
The report said non-farm payroll employment increased by 223,000 jobs in April compared to economist estimates for an increase of about 220,000 jobs.
However, the Labor Department also said the increase in employment in March was downwardly revised to 85,000 jobs from the previously reported 126,000 jobs.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said the downward revision took the gloss off the rebound in payrolls in April.
“We may see a further acceleration in employment growth going into the summer, but this isn’t the sort of unequivocal rebound that would give the Fed the confidence to begin tightening monetary policy before Independence Day,” Ashworth said.
The unemployment still edged down to 5.4 percent in April from 5.5 percent in March, matching economist estimates. The drop pulled the unemployment rate down to its lowest level since May of 2008.
Economic data may remain in focus next week, with traders likely to keep an eye on reports on retail sales, producer prices, and industrial production.
Bond trading could also be impacted by reaction to the Treasury Department’s auctions of three-year and ten-year notes and thirty-year bonds.
The Treasury is due to sell $24 billion worth of three-year notes next Tuesday, $24 billion worth of ten-year notes next Wednesday, and $16 billion worth of thirty-year bonds next Thursday.
The material has been provided by InstaForex Company – www.instaforex.com