Soft U.S. Jobs Report Dials Back Fed Hike Bets, Treasury Yields Slide
AI Market Summary
A materially weaker-than-expected US nonfarm payrolls print (57k vs 113k expected, with prior revisions lower) pushed Treasury prices up and front-end yields down, prompting markets to reduce near-term Fed hike odds and the longer-run path of tightening. The repricing in rates is supportive for risk assets and rate-sensitive sectors, while increasing focus on labor-force participation dynamics and growth momentum.
Impact level
● High
Affected assets
NCSIDXY2USD/USDT-0.59%
AI Insight · NCSIDXY2USD/USDTAI Insight
▲ Bullish
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Odaily Planet Daily reports that U.S. Treasuries rallied after a weaker-than-expected nonfarm payrolls release, prompting traders to scale back expectations for additional Federal Reserve rate hikes. The policy-sensitive 2-year Treasury yield fell 6 basis points to 4.11%, while the 10-year yield slipped 2 basis points to 4.46%.
Interest-rate swap pricing now implies about a 20% chance of a Fed hike at the meeting later this month, down from 33% before the data. Markets are also pricing in fewer than two rate increases through March 2027, with any single hike capped at 25 basis points.
Nonfarm payrolls rose by 57,000 last month, and the prior two months were revised lower. Economists surveyed by Bloomberg had forecast a gain of 113,000. The unemployment rate edged down to 4.2% as labor force participation declined sharply. (Finviz)
