Bonds whipsaw, world stocks barely higher after mixed U.S. jobs data

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U.S. Treasuries were mixed on Friday while MSCI's global equity index rose slightly after U.S. jobs growth slowed more than expected in June but remained strong.

on Friday showed employers added 209,000 new hires in June, below forecasts while May numbers were revised down by 33,000 to 306,000. Still the unemployment rate fell to 3.6% in June from 3.7% in May and average hourly earnings rose 0.4%, the same as May.U.S. labour market data had sent equities lower and boosted Treasury yields. But Friday's government data prompted a more muted market reaction and barely changed expectations for the Federal Reserve's rate hiking cycle.

"It shows the labor market is still hot, but certainly not as hot as the ADP number indicated yesterday, Peter Cardillo, chief market economist at Spartan Capital Securities. "Today's numbers confirm the job market is still strong ... and this report gives the green light to the Fed to raise rates." Traders were still betting on a more than 90% chance that the Fed would raise rates by a quarter of a percentage point in late July while expectations for another hike in September had fallen to around 21% from just under 28% on Thursday, according to CME Group'sU.S. Treasury yields moved lower although longer-dated yields were higher on the session, after a reading on the labor market calmed concerns that Federal Reserve could become more aggressive in raising interest rates.

Benchmark 10-year notes were down 1.1 basis points to 4.030%, from 4.041% late on Thursday. The 30-year bond was last up 2.2 basis points to yield 4.0253%, from 4.003%. The 2-year note was last was down 9.6 basis points to yield 4.91%, from 5.006% on Thursday.

 

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Payrolls report Friday likely to show a jobs market that is still hotThe consensus estimate is that payrolls rose by another 240,000 in June and the unemployment rate is projected to nudge lower to 3.6%.
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