Treasuries moved sharply lower during trading on Friday, as a better than expected employment report added to optimism about the economy.
Bond prices showed a steep move to the downside in early trading and remained stuck firmly in the red throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 6.5 basis points to 2.056 percent.
With the increase on the day, the ten-year yield extended a recent upward move, reaching its highest closing level in eleven months.
The weakness among treasuries came on the heels of the release of a report from the Labor Department showing stronger than expected job growth in the month of February.
The Labor Department said non-farm payroll employment rose by 236,000 jobs in February compared to economist estimates for an increase of about 171,000 jobs.
With the continued job growth, the unemployment rate dipped to 7.7 percent in February from 7.9 percent in January, falling to its lowest level since December of 2008.
Upbeat economic data from overseas also put pressure on treasuries, with a report from Japan’s Cabinet Office showing that the Japanese economy stabilized in the fourth quarter after seeing modest contractions in the two previous quarters.
A separate report from the Chinese General Administration of Customs showed an unexpected Chinese trade surplus in the month of February.
While the economic calendar for next week starts off relatively light, a slew of key data is scheduled to be released beginning on Wednesday.
Traders are likely to keep a close on the release of reports on retail sales, industrial production, and producer and consumer price inflation.
Bond trading could also be impacted by the results of the Treasury Department’s auctions of three-year and ten-year notes and thirty-year bonds.
by RTT Staff Writer
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