Treasuries Show Moderate Rebound Following Monthly Jobs Data

(RTTNews) - Following the considerable weakness seen in the previous session, treasuries regained some ground during trading on Thursday.

Bond prices moved to the upside in early trading and managed to remain positive for the remainder of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.5 basis points to 2.393 percent.

The moderate rebound by treasuries came following the release of the closely watched monthly jobs report, which showed slowed slightly weaker than expected U.S. job growth in the month of June.

The Labor Department said non-farm payroll employment increased by 223,000 jobs, modestly below the addition of 230,000 jobs anticipated by economists.

The report also showed downward revisions to the pace of job growth in April and May, with the job gains in the two months combined coming in 60,000 lower than previously reported.

Nonetheless, the unemployment rate still fell to 5.3 percent in June from 5.5 percent in May. Economists had expected the unemployment rate to dip to 5.4 percent.

The drop in the unemployment rate was primarily due to a steep drop in the size of the labor force, however, with the civilian labor force tumbling by 432,000 people.

The report also said average hourly employee earnings in June were unchanged compared to the previous month at $24.95. The annual rate of average hourly earnings growth subsequently slowed to 2.0 percent.

Paul Dales, Senior U.S. Economist at Capital Economics, said, "The lack of a sustained acceleration in wage growth could prompt the Fed to keep pushing back the timing of the first rate hike."

"But with other measures suggesting that wage growth has risen and the unemployment rate on a sustained downward trend, a September rate hike remains very much in play," he added.

Following the long holiday weekend, next week's trading is likely to be impacted by the outcome of the Greek referendum on Sunday.

Conflicting opinion polls have added to recent uncertainty about whether Greeks will vote to endorse the austerity measures proposed by the country's international creditors or reject the terms.

Reports on U.S. service sector activity and trade may also attract some attention along with the minutes of the latest Federal Reserve meeting and a speech by Fed Chair Janet Yellen.