By Ellen Freilich
NEW YORK Jan 4 U.S. Treasuries reduced early
losses on Friday after the U.S. employment report for December
appeared fairly neutral for bonds, encouraging some buyers to
take advantage of the past month's price cuts and yield
Ten-year Treasury yields have risen to 1.92
percent from 1.59 percent in early December.
"We continue to like buying this zone," said David Ader,
head of government bond strategy at CRT Capital Group in
The government's December U.S. employment report showed U.S.
job growth cooled to 155,000 jobs in December, from upwardly
revised job growth of 161,000 in November, putting the
unemployment rate at 7.8 percent, unchanged from the upwardly
revised November level.
The benchmark 10-year Treasury note, down 10/32 before the
report was released, trimmed its loss to 5/32, but later
expanded it again to 10/32.
Buyers then entered the market again, letting the 10-year
note trim its loss to 3/32 and leaving its yield at 1.93
percent, up slightly from 1.92 percent late on Thursday.
While December job growth was a little more lackluster than
November's growth, upward revisions to previous job reports and
small gains in the length of the workweek and average hourly
earnings were positive for the economy and slightly negative for
bonds, Ader said.
An aspect of the employment report that was "a tad
supportive" for bonds was that the number of government jobs
continued to shrink, he said.
After bond prices fell and yields rose on the release on
Thursday of Federal Open Market Committee minutes that sounded
more hawkish than anticipated, this employment report "should be
a little soothing," Ader said.
Analysts said the report buttressed expectations that the
economy would grow about 2 percent this year, an expansion
unlikely to push down unemployment quickly or make the U.S.
Federal Reserve alter its stimulative monetary policy.
The Fed has kept interest rates near zero since 2008, and in
September promised open-ended bond purchases to support lending
further. On Thursday, however, minutes from the Fed's December
policy review pointed to rising concerns over how the asset
purchases will affect financial markets.