Treasuries plunge on strong US jobs report

Friday, 05. July 2019 15:30

Prices of sovereign bonds issued by the Department of the Treasury in Washington tumbled on Friday, sending yields sharply higher, and the dollar jumped as the Bureau of Labor Statistics measured a surge of 224,000 in nonfarm employment for last month in the United States. The jobless rate advanced by 0.1 percentage points to 3.7% as more people entered the labor force, as seen in the rise of the participation rate to 62.9% from 62.8%. The shift in the markets came together with a plunge in other benchmark government debt securities.

Investors were clearly wary of the sustainability of the Federal Reserve's determination to take interest rates strongly lower as the jobs report indicated the economy may not be as ailing as policymakers have portrayed it to be. Stocks on Wall Street and precious metals slumped.

The US two-year yield spiked 8.9 basis points at 9:28 am CET to 1.847%. The 10-year rate skyrocketed 8.1 points to 2.032%. The 30-year gauge was 6.8 points up at 2.535%. Corresponding futures dropped 0.19%, 0.56% and a stunning 0.98%, respectively.

In comparison, the yields on 10-year German Bunds were 3.9 points higher at a negative 0.357% and Britain's equivalent grew by 3.8 points to 0.718%.

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