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US Treasury yields whipsaw after jobs report misses expectations

U.S. Treasury yields whipsawed upward on Friday, as investors pored over a slew of economic data, including the latest job figures from the U.S. Labor Department.

The yield on the benchmark 10-year Treasury note sat higher at around 2.157 percent at 2:54 p.m. ET, while the yield on the 30-year Treasury bond was also higher at 2.766 percent. Bond yields move inversely to prices.

Yields fell earlier in the day following the U.S. Labor Department's August jobs report, with the 10-year note falling to just above 2.10 percent.

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 latest jobs report out of the U.S. Labor Department showed that nonfarm payrolls increased by 156,000 in August versus 180,000 expected by Reuters.

Investors were closely watching for the report as they looked for clues about the Federal Reserve's next policy move. The Fed has indicated plans to raise its benchmark interest rate target another quarter-point this year, but could be held back due to weak inflation and anemic wage growth.

"Overall, this was a disappointing payrolls report with weaker-than-expected payrolls, weaker wages and higher-than-expected unemployment," wrote BNP Paribas global chief economist Paul Mortimer-Lee. "We have doubts about the reliability of the data and would expect revised figures to tell a more upbeat story."

"The data will not affect the Fed's assessment of the trend in the economy and,even if we take payrolls at face value, 156k is well above the longer-term 100k "breakeven."

U.S. 10-year intraday chart

Source: FactSet

Following the latest jobs numbers, investors turned their attention to the manufacturing ISM report on business. The Purchasing Managers' Index (PMI) registered 58.8 percent, an increase of 2.5 percentage points from the July reading of 56.3 percent. Construction spending fell 0.6 percent in July. The PMI number indicates growth in manufacturing for the 12th consecutive month and is the highest reading since April 2011, when the index registered 59.1 percent.

A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

Meanwhile, consumer sentiment missed expectations at 96.8, versus expectations of 97.3.

Meanwhile, politics will be at the back of investors' minds, after markets showed signs of turbulence earlier this week as tensions escalated between North Korea and the United States.

While concerns around geopolitics appear to have subsided in recent sessions, investors will still be on edge in case of any fresh news that emerges. Friday marked the start of the U.S. State Department's ban on U.S. passport holders travel to North Korea.

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Sticking with the U.S., the repercussions of Hurricane Harvey continues to leave its mark on markets, with investors wondering how much damage the natural disaster will have on the economy and sectors like energy and insurance.

Oil prices slipped into the red on Friday, with both U.S. crude and Brent trading lower.

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