Treasuries Advance Following Monthly Jobs Report

(RTTNews) - Following the pullback seen in the previous session, treasuries showed a notable move back to the upside during trading on Friday.

Bond prices advanced early in the day and remained firmly positive throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 4.9 basis points to 1.431 percent.

With the decrease on the day, the ten-year yield ended the session at its lowest closing level in four months.

The strength among treasuries came following the release of the Labor Department's closely watched monthly jobs report, which showed a continued reacceleration in the pace of U.S. job growth in the month of June.

The report showed non-farm payroll employment spiked by 850,000 jobs in June after surging by an upwardly revised 583,000 jobs in May.

Economists had expected employment to jump by about 700,000 jobs compared to the addition of 559,000 jobs originally reported for the previous month.

Following the decrease in employment seen last December, the pace of job growth has bounced back to its highest level since last August.

Meanwhile, the Labor Department said the unemployment rate unexpectedly inched up to 5.9 percent in June from 5.8 percent in May. The unemployment rate was expected to edge down to 5.7 percent.

The stronger than expected job growth paints a positive picture of the gradually reopening economy but is not seen as likely to significantly alter the Federal Reserve's timeline for tightening monetary policy.

"With further progress toward the Fed's dual mandate likely over the summer, we anticipate a Fed tapering announcement at the Jackson Hole Symposium in August," said Lydia Boussour, Lead US Economist at Oxford Economics

She added, "Still, while tapering would start in early 2022, rate liftoff wouldn't be on the table until early 2023."

A separate report from the Commerce Department showed the U.S. trade deficit widened roughly in line with estimates in the month of May.

Following the long holiday weekend, next week's trading may be impacted by reaction to the minutes of the latest Fed meeting.