FX.co ★ Treasury Yields Jump After Strong Jobs Report

The yield on the US 10-year Treasury note rose nearly 5 bps to 4.19% on Wednesday after a stronger-than-expected jobs report tempered expectations for Fed rate cuts this year. US nonfarm payrolls increased by 130K in January, while the unemployment rate unexpectedly declined to 4.3%, indicating a stable and more resilient labour market at the start of the year. In response, traders pushed back expectations for the next Fed cut, now fully pricing in a 25 bps reduction by July instead of June. Markets are currently discounting a total of 49 bps of easing by December, down from 59 bps on Tuesday. At the same time, the two-year yield, which is more sensitive to monetary policy expectations, climbed nearly 8 bps to 3.53%.