05.03.202119:26:00UTC+00Ten-Year Yield Closes Nearly Flat After Spiking Above 1.6%

After moving sharply lower early in the session, treasuries regained ground over the course of the trading day on Friday.

Bond prices climbed well off their early lows to end the day nearly unchanged. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.554 percent.

Before the turnaround, the ten-year yield rose as high as 1.626 percent, its highest intraday level in over a year.

The initial weakness among treasuries came after the Labor Department released a report showing much stronger than expected job growth in the month of February.

The Labor Department said non-farm payroll employment jumped by 379,000 jobs in February after climbing by an upwardly revised 166,000 jobs in January.

Economists had expected employment to increase by 182,000 jobs compared to the uptick of 49,000 jobs originally reported for the previous month.

The stronger than expected job growth was primarily due to a rebound in employment in the leisure and hospitality industry, which added 355,000 jobs.

The report also said the unemployment rate unexpectedly edged down to 6.2 percent in February from 6.3 percent in January. Economists had expected the unemployment rate to remain unchanged.

The modest decrease pulled the unemployment rate down to its lowest level since hitting 4.4 percent last March, when coronavirus-related lockdowns began to take effect.

The subsequent recovery by treasuries may have reflected bargain hunting, with the pullback by yields inspiring a rally by stocks on Wall Street.

In light of recent concerns about inflation, next week's trading may be impacted by reaction to reports on consumer and producer prices in the month of February.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auctions of three-year and ten-year notes and thirty-year bonds.