Treasurys Move Lower on Jobs Report Relief

U.S. Treasury debt prices traded lower Friday after October jobs data was not as dire as pessimists had feared.

Investors had already priced into bonds their expectations for a very weak number, and when their worst expectations were not met, they sold debt holdings.

"The numbers are weak across the board but I think they were well anticipated," said Thomas di Galoma, head of U.S. Treasury trading at Jefferies & Co in New York.

The U.S. 30-year bond traded over a full point lower in price as stocks extended their gains and cut demand for lower-risk assets like government debt.

The 30-year bond was trading 1-7/32 lower in price for a yield of 4.27 percent from 4.20 percent late Thursday, while the benchmark 10-year Treasury note was trading 25/32 lower in price for a yield of 3.79 percent from 3.69 percent.

The Labor Department said U.S. employers cut payrolls by 240,000 in October, marking the tenth straight month of contraction in jobs, while September was revised to the biggest monthly loss in jobs in nearly seven years at 284,000.

While the October number was worse than the median forecast of a loss of 200,000 from analysts polled by Reuters, it was still not as terrible as some had expected. Goldman Sachs had predicted job losses of 300,000.

"Although the consensus was down 200,000 for non-farm payrolls, at the back of their minds everyone was looking for a weaker number," said Sean Simko, fixed income portfolio manager at SEI in Oaks, Pa.

Five-year Treasury notes traded 6/32 lower in price for a yield of 2.50 percent from 2.46 percent late Thursday, while the 30-year bond was 5/32 lower for a yield of 4.21 percent from 4.20 percent.

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