TREASURIES-Yields fall as jobs data disappoints

Fri Feb 7, 2014 9:01am EST

Related Topics

* Yields fall after payrolls, 10-year notes yield 2.67 pct
    * Employers add 113,000 jobs, fewer than expected
    * Fed to buy $500 mln-$750 mln notes due 2024-2031

    By Karen Brettell
    NEW YORK, Feb 7 (Reuters) - U.S. Treasuries yields fell on
Friday after employers hired far fewer workers than expected in
January, suggesting a loss of momentum in the economy at the
same time as the Federal Reserve pares its bond purchase
program.
    Nonfarm payrolls roles only 113,000 in January, below
economists' expectations of 185,000 jobs, and job gains for
December were also barely revised up, while the unemployment
rate hit a new five-year low of 6.6 percent. 
    "It's disappointing," said David Coard, head of fixed income
sales and trading at Williams Capital Group in New York.
    The report is unlikely to sway the Federal Reserve from
continuing to make reductions in its bond purchase program,
however, with the next Fed meeting not scheduled until March.
    "I think you would have to have significant weakness or you
would need to see this disappointing trend extend another month
or two," said Coard.
    The Fed last week said it would reduce its monthly bond
purchases by $10 billion to $65 billion and it is expected to
continue cutting in $10 billion increments. 
    Five-year and seven-year notes, the most sensitive to Fed
interest rate policy, were among the best performers after the
data.
    Five-year notes gained 06/32 in price to yield
1.48 percent, down from 1.54 percent before the data. Seven-year
notes rose 8/32 in price to yield 2.13 percent, down
from 2.19 percent.
    Benchmark 10-year Treasuries were last up 9/32
in price to yield 2.67 percent, down from 2.72 percent before
the data was released. Thirty-year bonds rose 6/32
in price to yield 3.66 percent, down from 3.68 percent.
    The Fed will buy between $500 million and $750 million in
notes due 2024 to 2031 on Friday as part of its ongoing
purchases.
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