Treasuries Fluctuate Before Closing Modestly Lower

(RTTNews) - Treasuries fluctuated over the course of the trading session on Friday before eventually ending the day modestly higher.

Bond prices finished the day in positive territory but well off their highs of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.1 basis points to 3.710 percent.

With the decrease, the ten-year yield closed lower for the fourth consecutive session, ending the day at its lowest closing level in over a year.

The higher close by treasuries came amid concerns about the outlook for the U.S. economy after the Labor Department released a closely watched report showing employment rose by less than expected in the month of August.

The Labor Department said non-farm payroll employment climbed by 142,000 jobs in August compared to economist estimates for an increase of 160,000 jobs.

The report also said the increases in employment in June in July were downwardly revised to 118,000 jobs and 89,000 jobs, respectively, reflecting a net downward revision of 86,000 jobs.

Meanwhile, the Labor Department said the unemployment rate edged down to 4.2 percent in August from 4.3 percent in July.

The modest decrease, which was in line with estimates, came after the unemployment rate reached its highest level since October 2021.

While the data is seen as increasing the chances of a 50 basis point interest rate cut by the Federal Reserve later this month, traders seem worried the central bank may have waited too long to prevent the economy from slipping into a recession.

"The large downward revision to payroll gains in the prior two months and the continued narrow concentration in payroll advances underscore that the labor market is losing steam rather quickly," said Nationwide Chief Economist Kathy Bostjancic.

Next week's trading is likely to be driven by reaction to closely watched reports on consumer and producer price inflation in the month of August.