Treasuries snapped a three-day rally after a government report showed the economy added the most jobs last month since 2012, a sign that economic growth is poised to accelerate as the Federal Reserve pares monthly bond-buying and considers when to raise interest rates.
U.S. 10-year note yields rose as the unemployment rate fell to 6.3 percent, the lowest level since September 2008. The central bank said April 30 that “growth in economic activity has picked up recently.” Thirty-year bond yields fell to a 10-month low yesterday as weaker-than-forecast economic signals before the jobs report led traders to unwind hedges against higher interest rates.
“It’s positive, and the Fed’s call may be correct,” said Richard Schlanger, who helps invest $20 billion in fixed-income securities as vice president at Pioneer Investments in Boston. “We’re locked in this trading range, but we’re going to be testing the upper range” for yields, he said.
Benchmark 10-year yields rose seven basis points, or 0.07 percentage point, to 2.69 percent as of 8:44 a.m. New York time, based on Bloomberg Bond Trader data. The 2.75 percent note due February 2024 dropped 19/32, or $5.94 per $1,000 face amount, to 100 18/32.
Thirty-year bond yields added four basis points to 3.45 percent, after touching 3.40 percent yesterday, the lowest level since June 20.