Tue. Sep 29th, 2020

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10-year Treasury yield jumps to 0.7% followed by low unemployment rate

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Treasury yield jumped higher after August jobs data came in stronger than expected.

The yield on the benchmark 10-year Treasury note climbed 8 basis points to hit a high of 0.70%, while the yield on the 30-year Treasury bond also gained 8 basis points to 1.42%. Yields move inversely to prices.

The U.S. economy added 1.37 million jobs in August, according to Labor Department figures. The number was ahead of the 1.32 million expected by economists polled by Dow Jones.

The unemployment rate also fell to 8.4% from 10.2% in July, by far the lowest since the coronavirus shutdown in March. The consensus estimate was for the jobless rate to decline to 9.8%.

“It’s a strong growth reaction. Higher yields, steeper curve,” said John Briggs of NatWest. “I think a lot of it is the unemployment side of it. If you’re tightening the labor market that quickly, it should have a negative reaction in the bond market.”

 

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