US Treasury Markets
11/6/2009 10:00 AM ET
(RTTNews) -
Treasuries are showing modest strength in morning trading on Friday, as traders have bought into the safety of the guaranteed returns offered by the bond market following the day's dismal employment data.
The benchmark ten-year note opened higher and extended its gains following the release of the data, although it has moved well off of its best levels of the day. Subsequently, the yield on the note, which moves opposite of its price, is trading at 3.508 percent, posting a loss of 2.5 basis points.
In the previous session, the ten-year yield snapped three straight days of gains, but the modest loss left the yield near October's two-month closing high.
The strength in bonds comes as employment fell by more than expected in the month of October, according to a report released by the Labor Department this morning. The continued decrease in jobs pushed the unemployment rate up to a new twenty-six year high above 10 percent.
The report showed that non-farm payroll employment fell by 190,000 jobs in October following a revised decrease of 219,000 jobs in September. Economists had expected a decrease of about 175,000 jobs compared to the loss of 263,000 jobs originally reported for the previous month.
With the continued drop in jobs, the unemployment rate jumped to 10.2 percent in October from an unrevised 9.8 percent in September. The unemployment rate had been expected to show a more modest increase to 9.9 percent.
The bigger than expected increase lifted the unemployment rate to its highest level since a matching rate in April of 1983.
Also on the economic front, the Commerce Department's wholesale inventories report is due to be released at 10 a.m. ET. Inventories at the end of September are expected to have declined by 1 percent.
The Federal Reserve's consumer credit report for September may also garner some attention as traders look to see if there has been a slowdown in the decline in outstanding consumer credit. Economists expect consumer credit to shrink by $10 billion. The report is due to be released at 3 p.m. ET.
by RTT Staff Writer
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