Treasuries Close Nearly Flat Following Choppy Trading Day

(RTTNews) - Treasuries showed a lack of direction throughout the trading session on Friday before eventually ending the day roughly flat.

Bond prices spent the day bouncing back and forth across the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.736 percent.

The slight drop by the ten-year yield came after it closed higher in the five previous sessions to reach a four-month closing high.

The choppy trading came following the release of a report from the Labor Department showing that U.S. employment increased by less than expected in the month of September.

The report said non-farm payroll employment climbed by 156,000 jobs in September compared to economist estimates for an increase of about 176,000 jobs.

While the job gains in August were upwardly revised to 167,000 from 151,000, the job growth in July was downwardly revised to 252,000 from 275,000.

The Labor Department also said the unemployment rate edged up to 5.0 percent in September from 4.9 percent in August. Economists had expected the unemployment rate to remain unchanged.

Meanwhile, the report said average hourly employee earnings rose by 6 cents to $25.79. Compared to the same month a year ago, average hourly earnings were up by 2.6 percent.

Speaking at the Institute of International Finance's annual meeting in Washington, D.C., Federal Reserve Vice Chair Stanley Fischer said the jobs data was "pretty close" to an ideal "Goldilocks" reading.

Fischer said the rate of job growth is "fully consistent" with a continued decline in unemployment and suggested the U.S. is close to full employment.

Analysts said the weaker than expected job growth should quell any speculation of an interest rate hike at Fed's next meeting in November, although a rate hike at the December meeting remains on the table.

While the economic calendar for next week starts off relatively light, traders are likely to keep a close eye on reports on retail sales and producer prices due next Friday.

The minutes of the latest Fed meeting are also likely to attract attention amid lingering uncertainty about the outlook for monetary policy.

Bond trading may also be impacted by reaction to the Treasury Department's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury is due to auction $24 billion worth of three-year notes and $20 billion worth of ten-year notes on Wednesday and $12 billion worth of thirty-year bonds on Thursday.