Fixed Income Forum

U.S. Treasury yields took a nose-dive on Friday, owing to last month’s job report, that showed a mild increase in unemployment. While yield on the 10-year treasury benchmark slipped to 1.42%, its lowest level since June 21, yield for the 30-year treasury benchmark fell by 5 basis points, to 2.04%.

June’s update on the labor market showed that 850,000 new jobs were created in the month, as hirings increased across sectors. The unemployment rate, however, increased to 5.9% as against market expectations of 5.6%, while wages were up by 0.3%. The labor force participation rate remained unchanged at 61.6%, as it was in October 2020.

Global stocks rose on Friday, advancing from a drop in the yields, while the dollar dipped from a three-month high. Oil prices displayed a rather mixed sentiment, with Brent crude up by 33 cents and U.S. crude down by 7 cents.
Concerns over the COVID-19 Delta variant’s effect on the economy’s path to recovery also played its part in different markets, and analysts believe that it would take more than a year for employment to reach pre-Covid levels, at the current hiring pace.

U.S. Markets closed a hour early on Friday and remained closed on 5th July 2021 as well, owing to Independence Day celebrations across the country.

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