Ten-Year Yield Plunges To Seven-Month Low Following Jobs Data

After moving sharply higher over the course of the previous session, treasuries showed another substantial move to the upside during trading on Friday.

Bond prices spiked early in the session and remained firmly positive throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, plunged 18.4 basis points to 3.792 percent.

The ten-year yield closed lower for the sixth consecutive session, tumbling to its lowest closing level since late last December.

The continued rally by treasuries came amid continued concerns about the U.S. economy following the release of a closely watched Labor Department report showing employment increased by much less than expected in the month of July.

The report said non-farm payroll employment climbed by 114,000 jobs in July after jumping by a downwardly revised 179,000 jobs in June.

Economists had expected employment to rise by 175,000 jobs compared to the surge of 206,000 jobs originally reported for the previous month.

The Labor Department also said the unemployment rate rose to 4.3 percent in July from 4.1 percent in June. Economists had expected the unemployment rate to remain unchanged.

With the unexpected increase, the unemployment rate reached its highest level since hitting 4.5 percent in October 2021.

"After this morning's jobs report, the Fed should have buyer's remorse about its decision to leave rates unchanged on Wednesday," said FHN Financial chief economist Chris Low. "The unemployment rate is now higher than the level the Fed considers consistent with full employment."

"This is just one report, and it could have been affected by Hurricane Beryl despite the lack of overt evidence," he added. "But this release is not anomalous. The pace of labor market cooling has accelerated since March."

Reports on service sector activity, the U.S. trade deficit and weekly jobless claims are likely to attract attention next week along with the results of auctions of three-year and ten-year and thirty-year bonds.

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