Treasuries recently experienced a significant decline in trading on Friday, following several strong sessions. Bond prices saw a drastic fall in early trading, with further drops in the morning before stagnating in the afternoon. As a result, the yield on the core ten-year note soared by 17.0 basis points to reach 4.033 percent.
For the first time this week, the ten-year yield ended on a high note, making a significant recovery from its lowest closing point in a month. Treasuries' sell-offs occurred in the aftermath of a critical Labor Department report which highlighted far stronger than anticipated job growth in January.
According to the Labor Department, non-farm payroll employment surged by 353,000 jobs in January, a sharp contrast to economists' predictions of a rise of approximately 180,000 jobs. Additionally, the report revealed that December's job growth was significantly stronger than initially reported, with employment skyrocketing by 333,000 jobs, as opposed to the previously reported increase of 216,000 jobs.
In January, the unemployment rate remained consistent with the previous month's figure of 3.7 percent, despite economists' projections of a small increase to 3.8 percent. The report also revealed a slight increase in the annual wage growth rate to 4.5 percent in January, up from an adjusted 4.4 percent in December. Experts had anticipated wage growth would remain steady compared to the initially reported rate of 4.1 percent for the prior month.
Given this data, the likelihood of the Federal Reserve cutting interest rates in March has further diminished, with the CME Group's FedWatch Tool predicting just a 20.5 percent chance of a rate cut. After a week filled with key economic events, the US economic calendar for the coming week appears relatively calm. Nonetheless, traders will likely monitor reports on weekly jobless claims, service sector activity, and the U.S. trade deficit.
