Treasuries Turn Lower Following Disappointing Jobs Data

(RTTNews) - After an early move to the upside, treasuries moved notably lower over the course of the trading session on Friday.

Bond prices pulled back into negative territory and remained in the red for the remainder of the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.6 basis points to 2.157 percent.

The downturn by treasuries came following the release of a report from the Labor Department showing weaker than expected job growth in the month of August.

The Labor Department said non-farm payroll employment climbed by 156,000 jobs in August compared to expectations for an increase of about 180,000 jobs.

The report also said the job growth in June and July was downwardly revised to 210,000 jobs and 189,000 jobs, respectively, reflecting a net downward revision of 41,000 jobs.

Reflecting the weaker than expected job growth, the unemployment rate inched up to 4.4 percent in August from 4.3 percent in July. Economists had expected the unemployment rate to remain unchanged.

Treasuries initially reacted positively to the disappointing report but turned lower as analysts said the data is not likely to impact the Federal Reserve's decision to raise interest rates.

A separate report from the Institute for Supply Management showed activity in the manufacturing sector expanded faster than estimated in the month of August.

The ISM said its purchasing managers index climbed to 58.8 in August from 56.3 in July, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to inch up to 56.5.

The bigger than expected increase lifted the purchasing managers index to its highest level since reaching 59.1 in April of 2011.

Following the long holiday weekend, next week's trading may be impacted by reports on service sector activity, international trade, and factory orders.

The Fed is also scheduled to release its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.