NEW YORK (MarketWatch) —Treasury prices rallied on Tuesday, sending yields lower, after September’s nonfarm payrolls report missed consensus estimates.
The U.S. economy added 148,000 jobs in September, below expectations of 185,000, the Labor Department said. The unemployment rate dropped to 7.2% from 7.3%. The data had been delayed because of the government shutdown. Treasurys moved higher on the news.
The 10-year note (ICAP.SD:10_YEAR) yield dropped 6.5 basis points on the day to 2.546%, after trading as low as 2.530%. The 10-year note is on track for its lowest closing yield since mid-July.
The 30-year bond (ICAP.SD:30_YEAR) yield fell 4.5 basis points to 3.628%, and the 5-year note (ICAP.SD:5_YEAR) yield fell 4.5 basis points to 1.315%.Bloomberg A job fair in Los Angeles.
The labor data serve as one of the most important economic indicators watched by the Federal Reserve as it contemplates adjustments to its monetary policies. The central bank had indicated earlier this year that if the economy continues to improve, it could scale back its bond-buying stimulus, which has helped hold yields lower. However, lackluster data could change market expectations for the time-frame of the so-called tapering. Treasury yields moved sharply higher over the course of the summer as the market priced in expectations of the Fed’s stimulus withdrawal.
“The Fed will be in no rush to engage in tapering this year, in this analyst’s view,” said Tanweer Akram, senior economist with ING U.S. Investment Management, in a note. “As a result, 10-year Treasury yields are likely to stay confined in a range of 2.2% to 3.2% for the rest of the year.”
Ben Eisen is a MarketWatch reporter based in New York.
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