Now Reading: US yields fall as July payrolls drop dashes Fed hike bets
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US yields fall as July payrolls drop dashes Fed hike bets
US Treasury yields fell on Friday after data showed employers unexpectedly shed 23,000 jobs in July, prompting traders to cut odds of a Federal Reserve interest-rate hike in September. The 2-year yield…
The Story in Brief
US Treasury yields fell on Friday after data showed employers unexpectedly shed 23,000 jobs in July, prompting traders to cut odds of a Federal Reserve interest-rate hike in September. The 2-year yield dropped as much as nine basis points before settling near 4.19%, its biggest weekly fall since May, while the 10-year yield ended the week down about nine basis points at 4.65%.
Economists polled by Reuters had forecast 80,000 job gains. The unemployment rate eased to 4.1% as labour-force participation fell to 61.4%, a near five-and-a-half-year low. Fed funds futures traders now see 44-56% odds of a September hike, down from 55-60% before the data, according to Livemint and ETMarkets. The dollar weakened 0.52% against the yen to 157.62, and gold rose 2.28% to $4,336 an ounce.
The Indian Opinion
One weak jobs report should not spark panic, but the rush to declare the Fed done is premature. The unemployment rate fell, participation dropped, and wage growth cooled, so the picture is mixed, not uniformly bad. Traders still price a 77% chance of a hike by December, and next week's CPI and $125 billion in Treasury auctions will test conviction. Watch whether oil-driven inflation forces the Fed's hand despite soft hiring, or whether this jobs data becomes the new trend rather than an outlier.
Sources (3): livemint.com, livemint.com (2), economictimes.indiatimes.com
This story was synthesised by AI from the 3 sources linked above.
Updated: this story now draws on 3 sources.
