US yields rise, reversing initial reaction to weak jobs report
TLT•US Treasury yields rose after initially falling following a September jobs report showing payrolls increased by 29,000, below expectations for 90,000. The 10-year yield rose 4.72 basis points to 5.281%, while traders priced in an 86% chance of a December Fed rate hike.
1. Yields reverse course
Treasury yields reversed earlier declines as investors digested the weaker-than-expected September jobs report. Payrolls increased by 29,000, compared with expectations for 90,000, and the unemployment rate was 4.2%, versus expectations for 4.1%. August job growth was revised down to 133,000 from 162,000.
2. Weekly yield moves
The 10-year yield rose 4.72 basis points to 5.281%, after falling earlier to 5.1570%. The 2-year yield rose 3.98 basis points to 4.827%, while the 30-year yield increased 2.91 basis points to 5.6321%. For the week, the 10-year yield was on track for a 10-basis-point gain, its fifth consecutive weekly advance; the 2-year yield was down 3.3 basis points.
3. Rate expectations
Traders priced in roughly an 80% probability that rates would be unchanged at the Fed's meeting that month, up from 74% before the jobs data. Expectations for a December rate hike fluctuated around 86%.
