Treasuries Close Firmly Negative Following Upbeat Jobs Data

(RTTNews) - With traders reacting to a relatively upbeat monthly jobs report, treasuries came under pressure during trading on Friday.

Bond prices showed a notable move to the downside in early trading and remained stuck in the red for the remainder of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 5.3 percent to 2.79 percent.

The ten-year yield extended the upward trend seen over the past few sessions, reaching its highest closing level in well over a month.

The weakness among treasuries came following 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 175,000 jobs in February compared to economist estimates for an increase of about 150,000 jobs.

Additionally, the report showed a net upward revision to the two previous months of 25,000 jobs, with employment in December and January rising by 84,000 jobs and 129,000 jobs, respectively.

Despite the continued job growth, the unemployment rate edged up to 6.7 percent in February after dipping to a five-year low of 6.6 percent in January. The unemployment rate had been expected to come in unchanged.

Meanwhile, the Labor Department also said average hourly earnings rose 0.4 percent in February, representing the strongest monthly growth since June of last year.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, the winter months of December thru February averaged 129k jobs compared with 230k in the same months last winter, thus pointing to the weather impact but there is no more excuses going forward and hopefully we'll get a snapback."

"That said, the inflation component of higher wages, combined with higher commodity prices is something that bonds should start paying attention to," he added.

The jobs report overshadowed a separate report from the Commerce Department showing that the U.S. trade deficit edged slightly wider in the month of January.

Following the slew of economic data released over the past week, the economic calendar for next week is relatively quiet. Trading could still be impacted by the release of reports on retail sales, producer prices, and consumer sentiment.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auctions of three-year and ten-year notes and thirty-year bonds.