* U.S. nonfarm payrolls rose by 192,000 in March
* U.S. unemployment rate unchanged at 6.7 pct
* Medium-term Treasuries yields see biggest dip
By Sam Forgione
NEW YORK, April 4 U.S. Treasuries yields dipped
Friday after an employment report for March came in slightly
lower than economists expected, leading medium-term yields to
fall the most as fears eased of an early hike in interest rates
by the Federal Reserve.
Nonfarm payrolls increased by 192,000 new jobs last month
after rising 197,000 in February, the Labor Department said. The
unemployment rate was unchanged at 6.7 percent. Economists had
expected employment to increase 200,000 last month and the
unemployment rate to fall one-tenth of a percentage point.
"It's a solid, on-trend number that was perhaps a little
less on the headline than traders' expectations, so we're seeing
a little bit of a bond market rally," said John Briggs, U.S.
rates strategist at RBS in Stamford, Connecticut.
Short- and medium-term Treasuries yields had surged after
Fed Chair Janet Yellen suggested on March 19 that the central
bank could raise interest rates earlier than expected. Yellen's
remarks turned more dovish in a speech on March 31, when she
defended the Fed's supportive measures.
"This number doesn't give any reason to move up the Fed
timing of rate hikes, which is what was feared most," said
Briggs of RBS.
Short- and medium-dated Treasuries notes are viewed as most
vulnerable to a hike in overnight interest rates, which are
currently near zero.
While the data eased fears of an imminent Fed rate hike, it
should allow the central bank to continue scaling back its
monthly bond-buying stimulus, traders said. Yellen has argued
that the Fed needs to maintain a highly accommodative monetary
policy for some time to eliminate slack in the labor market.
The employment report offered further evidence of resilience
in the U.S. economy after a brutally cold winter hurt economic
data at the start of the year.
"The economy was performing about as well as it could have
given those adverse effects," said Dan Heckman, senior fixed
income strategist at U.S. Bank Wealth Management in Kansas City,
The 7-year U.S. Treasury note rose 10/32 in price
to yield 2.33 percent, compared to a yield of 2.38 percent late
Thursday. The 5-year Treasury note rose 8/32 in price to yield
1.73 percent, compared to a yield of 1.79 percent late Thursday.
The benchmark 10-year U.S. Treasury note rose
9/32 in price to yield 2.76 percent, compared to a yield of 2.79
percent late Thursday. The 30-year Treasury bond
rose 9/32 in price to yield 3.61 percent, compared to a yield of
3.63 percent late Thursday.
On Wall Street, U.S. stocks opened higher, putting both the
Dow Jones industrial average and the Standard & Poor's
500 at record levels.
(Editing by Bernadette Baum)