U.S. rate futures turn higher after U.S. jobs data
NEW YORK Feb 7 (Reuters) - U.S. short-term interest rates futures rose on Friday, erasing earlier losses after a sharply weaker-than-expected U.S. payrolls report for January raised expectations the Federal Reserve would leave policy rates near zero longer than previously thought.
The U.S. Labor Department said domestic employers added 113,000 workers last month, fewer than the 185,000 forecast by analysts polled by Reuters. The jobless rate as expected dipped to 6.6 percent from December's 6.7 percent.
The rise in federal funds futures suggested traders reckoned less likelihood the U.S. central bank would hike the overnight interbank rate at its July 2015 policy meeting. They now expected a rate hike would more likely occur in the third quarter of 2015
The July 2015 fed funds contract last traded at 99.70, up 1 basis point from Thursday's close. It erased an earlier decline of 1.5 basis points before the release of the government's January jobs data.
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