Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

U.S. Government Bonds Fall As Labor Data Prompts Fed Pause Bets

share with twitter share with LinkedIn share with facebook
share via e-mail
0
12/07/2018 | 11:38am EDT

By Daniel Kruger

U.S. government bond prices fell after Friday's jobs report showed wage growth and unemployment matching investors' expectations.

The yield on the benchmark 10-year Treasury note rose to 2.897%, according to Tradeweb, from 2.872% Thursday.

Yields, which rise when bond prices fall, climbed after the Labor Department said Friday that U.S. employers slowed their pace of hiring in November, adding 155,000 jobs -- below the 198,000 predicted by economists surveyed by The Wall Street Journal. Wage growth matched the highest rate in nearly a decade, raising concerns about inflation, which erodes the purchasing power of bonds' fixed payments.

Yield gains were also accompanied by a rise in crude oil, which surged after members of the Organization of the Petroleum Exporting Countries reached a tentative deal to curb production. Oil prices are another component of inflation data.

In the past month, yields have fallen as some Fed officials have appeared increasingly willing to reconsider the plan to raise interest rates at a gradual pace. The Fed's tone has changed at the same time as financial markets have become increasingly volatile, yet there have been few signs that officials are broadly revising their forecasts. Continued trade tensions between the U.S. and China have also contributed to the decline in yields, analysts said.

A report from The Wall Street Journal Thursday that Fed officials are considering whether to signal a new wait-and-see approach at their December meeting eased concerns about the pace of rate increases, helping stocks and yields pare steep declines. Stocks also retreated Friday.

"I don't think [the report] derails the Fed this month, but perhaps it opens the door to a more flexible approach going forward," said Dan Mulholland, senior bond trader at Crédit Agricole.

When Fed officials met in September, they raised rates for the third time this year and penciled in one additional increase this year. They also signaled their intention to raise rates three times in 2019. While investors widely expect them to boost rates at their meeting later this month, they are becoming increasingly skeptical that policy makers will be able to meet that forecast.

Fed funds futures, which investors use to bet on the path of monetary policy, showed early Friday a 5% probability that the central bank will raise interest rates three or more times next year. That is down from 31% a month ago.

Some investors said concerns that slowing growth overseas would weigh on the U.S. was also dragging on expectations for interest-rate policy.

"It probably indicates as much concern about the economy outside the U.S. as it does about the economy inside the U.S.," said John Vail, chief global strategist at Nikko Asset Management.

Write to Daniel Kruger at Daniel.Kruger@wsj.com

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Economy & Forex"
01:37aNOVARTIS HAS 25 BLOCKBUSTERS IN THE PIPELINE : Ceo
RE
01:36aSTEELY AMBITION : China's Baowu eyes moving blast furnaces to Cambodia
RE
01:34aARM supply halt deals fresh blow to Chinese tech giant Huawei
RE
01:34aU.S. startup accuses Huawei executive of involvement in trade-secrets theft -WSJ
RE
01:16aSingapore's April Inflation Matches Expectations
DJ
01:16aNEWS HIGHLIGHTS : Top Global Markets News of the Day
DJ
01:16aNEWS HIGHLIGHTS : Top Company News of the Day
DJ
12:52aJAPAN'S ASO : No plan to adopt restrictions on JGB short-selling
RE
12:16aNEWS HIGHLIGHTS : Top Financial Services News of the Day
DJ
05/22Asia shares hit four-month low on risk of endless trade war
RE
Latest news "Economy & Forex"
Advertisement