TREASURIES-US yields rise after stronger than expected jobs gains in May
By Karen Brettell
June 6 (Reuters) - U.S. Treasury yields rose after data on Friday showed that employers added more jobs than economists had expected in May, indicating that the labor market remains solid despite concerns that it will weaken.
Employers added 139,000 jobs last month, above estimates for a 130,000 increase. Average hourly earnings increased 0.4% in May, above expectations for a 0.3% increase. The unemployment rate held steady at 4.2%, as expected.
“The sell-off (in Treasuries) really reflects this idea that growth sentiment is heading in a bullish direction. We have yet another month of hard data resilience," said Will Compernolle, macro strategist at FHN Financial.
"There is positive progress on tariffs moderating, even if there's nothing final yet. And a lot of the doomsday scenarios people thought were always one month away, it just seems to be a less likelihood that it's coming," Compernolle said.
The yield on benchmark U.S. 10-year notes US10YT=RR was last up 7.7 basis points on the day at 4.472%. Interest rate sensitive two-year note yields US2YT=RR rose 7.7 basis points to 4.001%.
The yield curve between two-year and 10-year notes US2US10=TWEB was at 47 basis points.
Investors are concerned that the labor market will soften as companies grapple with the impact of tariffs, which many analysts expect will slow the economy and add to inflation pressures.
Optimism that the United States and China will reach a deal to avoid high trade levies, however, has boosted risk sentiment.
U.S. President Donald Trump and Chinese leader Xi Jinping held a rare leader-to-leader call on Thursday that left key issues to further talks.
The planned meeting between U.S. and Chinese officials on trade is expected to take place within seven days , White House trade adviser Peter Navarro said on Friday.
The Federal Reserve is expected to keep rates steady when it meets on June 17-18 as policymakers evaluate how tariffs will impact the economy.
Fed funds futures traders are now pricing in a 63% probability that the Fed will cut rates in, or before September, compared to 74% on Thursday, according to the CME Group's FedWatch Tool.
Related Articles
What hurdles lie ahead for any US-China TikTok deal?
By David Shepardson WASHINGTON, Sept 15 (Reuters) - Questions and potential hurdles surround a framework agreement announced on Monday between the U.S. and China that would switch short-video app TikTok to U.S.-controlled ownership, including whether any deal will comply with a 2024 law. U.S. and
[Reuters Analysis] Hedging surge reflects crowded trade - long Wall Street, short U.S. dollar: McGeever
By Jamie McGeeverORLANDO, Florida, Sept 16 (Reuters) - The rush to hedge U.S. equity exposure this year was initially seen as part of a broad 'de-dollarization' process, reflecting global investors' discomfort with President Donald Trump's trade, economic and foreign policy agendas. ...
September Fed Watch: A Policy Pivot That Could Make or Break the Bull Stock Market
TradingKey - The Fed’s September FOMC meeting is widely seen as locking in the first rate cut of 2025. Yet strategists at Morgan Stanley, JPMorgan, and Oppenheimer warn that as investors shift focus to slowing growth, a more cautious tone may replace bullish stock sentiment.
Effects of Interest Rate Cuts: Impact of Fed's September Meeting on Crypto Market
The Fed’s rate cut decision is a major bullish catalyst for crypto — but it comes with uncertainty. Investors should understand the economic rationale behind the move and adjust strategies accordingly. Staying flexible, informed, and disciplined is key to thriving in crypto’s fast-moving environment
Fed to Cut Rates: All Asset Prices Up!
TradingKey - The Federal Reserve is almost certain to restart its interest rate cut cycle on 17 September this year. After in-depth research, we have concluded that cryptocurrencies, the broader U.S. stock market, and short-term U.S. Treasury bonds will all go up.
