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Treasury yields climb on solid jobs report; Dollar pops higher

Treasury yields rose on Friday after the US economy created more jobs than expected last month and fueled speculations that a third interest rate rise this year could still be on the table despite recent dovish comments from the Federal Reserve.

The yield on the 10-year note was 2.7 basis points higher at 2.5 per cent after the latest jobs report came out. (Yields rise when prices fall.) That on the more policy sensitive 2-year rose 1.6bps to 1.355 per cent.

The dollar climbed against the euro, Japanese yen and British pound sterling the report underlined the strength of the US labour market after a string of disappointing economic reports over the last week.

The yen fell 0.5 per cent against the dollar to 110.54, reversing an earlier gain that took the currency to 109.85, its strongest level in more than a month. The euro dipped 0.2 per cent to $1.1844 and the pound fell 0.2 per cent to $1.3107 against the greenback.

“This should keep the chances of a December rate rise alive,” said Luke Bartholomew, investment strategist at Aberdeen Asset Management. “The next rate rise really boils down to whether inflation picks up and this requires stronger wage growth. While far from spectacular, especially given the further fall in unemployment, today’s wage numbers are just about enough for now.”