US yields rise, reversing initial reaction to weak jobs report
TLT•Treasury yields rose after initially falling following a September jobs report showing 29,000 payroll gains, below expectations for 90,000. The 10-year yield rose 2.82 basis points to 5.262%, while traders priced an 88% chance of a December Fed rate hike.
1. Yields reverse course
US Treasury yields reversed earlier declines as investors digested September’s weaker-than-expected jobs report. The economy added 29,000 jobs, compared with expectations for 90,000, and the unemployment rate was 4.2%, versus forecasts of 4.1%; August payroll growth was revised down to 133,000 from 162,000.
2. Treasury yields climb
The 10-year yield rose 2.82 basis points to 5.262%, after falling to 5.1570%. The 30-year yield rose 1.76 basis points to 5.6206%, and the 2-year yield gained 3.14 basis points to 4.818%, after reaching a two-week low of 4.6934%.
3. Rate expectations shift
Traders priced a roughly 76% probability that rates would be unchanged at the Fed’s meeting this month, compared with 74% before the report. The probability of a December hike rose to 88% after falling to about 76% following the release. TD Securities’ Molly Brooks said the report eased concern about labor-market reacceleration but cautioned that the bond market was not out of the woods.
