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Bonds flat as investors gear up for US jobs report

Traders in the 10-year bond options pit at the Chicago Board of Trade signal orders.
Frank Polich | Reuters
Traders in the 10-year bond options pit at the Chicago Board of Trade signal orders.

U.S. Treasurys were unchanged on Thursday after traders bought U.S. government debt on caution ahead of a key U.S. jobs report, while concerns weighed about the prospect of an interest rate increase by the Federal Reserve.

Traders and analysts are awaiting the U.S. Labor Department's September U.S. non-farm payrolls report, which will be released at 8:30 a.m. (1230 GMT) on Friday. Economists expect the report to show that employers added 203,000 jobs in September, according to a Reuters poll.

"Everyone is making sure they are squared away because if the report is good, it'll keep December on the table for a rate hike, but if it's not, it will push the move into next year," said Stanley Sun, interest rate strategist at Nomura Securities International in New York.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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The yield on the benchmark 10-year Treasury note were flat at 2.039 percent, after hitting a session low of 2.00 percent, it's weakest since August 24. The yield on the 30-year Treasury bond was down 1 basis point at 2.84 percent, near a session low.

Yields on U.S. Treasurys maturing between 3 to 30 years hit their lowest levels in over five weeks, with benchmark 10-year yields hitting a session low of 2.009 percent.

Through much of the week, traders fled to Treasuries on concerns about global growth and a selloff in commodities.

Analysts have said the report will be crucial to the central bank's decision on when to increase interest rates for the first time in nearly a decade, after its policy-setting group, the Federal Open Market Committee (FOMC), decided against raising rates in September, citing concerns about global risks and volatility.

Since the meeting, several top Fed policymakers including Chair Janet Yellen have said the central bank could raise rates by the end of the year if the economy continues to improve. Analysts said the jobs report would be a key indication of the health of the economy.

On Wall Street, the benchmark S&P 500 stock index was last down 0.4 percent.

Correction: This story has been updated to reflect that it was ISM manufacturing data that was released.