(RTTNews) - Treasuries showed a notable move to the downside during trading on Friday, extending the modest pullback seen in the previous session.
Bond prices regained some ground after coming under pressure early in the session but remained firmly negative. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.7 basis points to 4.487 percent.
The ten-year yield added to the 1.8 basis point uptick seen on Thursday, climbing further off its lowest closing level in well over a month.
Treasuries initially came under pressure following the release of the Labor Department's closely watched report on employment in the month of January.
The report said non-farm payroll employment rose by 143,000 jobs in January compared to economist estimates for an increase of about 170,000 jobs.
Meanwhile, employment in December and November surged by upwardly revised 307,000 jobs and 261,000 jobs, respectively, reflecting a net upward revision of 100,000 jobs.
The Labor Department also said the unemployment rate dipped to 4.0 percent in January from 4.1 percent in December. The unemployment rate was expected to remain unchanged.
"An unemployment rate at 4% is considered very low, giving the Fed reason to keep fed funds unchanged in the near term," said Jeffrey Roach, Chief Economist for LPL Financial.
Treasuries saw further downside after the University of Michigan released a separate report showing consumer sentiment has unexpectedly deteriorated in February amid a surge by year-ahead inflation expectations.
The University of Michigan said its consumer sentiment index slumped to 67.8 in February after rising to 71.1 in January. Economists had expected the index to inch up to 72.0.
With the unexpected decrease, the consumer sentiment index dropped to its lowest level since hitting 66.4 in July 2024.
The deterioration by consumer sentiment came as year-ahead inflation expectations spiked to 4.3 percent in February from 3.3 percent in January, reaching the highest level since November 2023.
"Many consumers appear worried that high inflation will return within the next year," said Surveys of Consumers Director Joanne Hsu. "This is only the fifth time in 14 years we have seen such a large one-month rise (one percentage point or more) in year-ahead inflation expectations."
Treasuries regained some ground due to the appeal as a safe haven after President Donald Trump said he plans to announce reciprocal tariffs on many countries next week, with the U.S. imposing tariffs on imports equal to the rates imposed on American exports.
Reports on consumer and producer price inflation are likely to be in focus next week along with congressional testimony by Federal Reserve Chair Jerome Powell.
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