Economy loses 95K jobs in September; Treasury rates drop on expectations of a Fed move

Friday, October 8, 2010

Treasury rates falling on gloomy jobs report

NEW YORK — Treasury rates slipped for a fifth straight day after the government released another gloomy jobs report.

The Labor Department said the economy lost 95,000 jobs in September. The unemployment rate remained 9.6 percent.

That’s not as bad as the 9.7 percent unemployment rate the market expected. But traders saw nothing in the data to prevent the Federal Reserve from launching a new effort to push down Treasury rates. Many expect the Fed to make a move after its meeting in November.

Yields on notes ranging from two to seven years fell. The yield on the five-year note fell to 1.10 percent from 1.12 percent, while the two-year note’s yield edged down to 0.35 percent from 0.36 percent.

Longer-dated yields inched up. The yield on the 10-year note rose to 2.39 percent from 2.38 percent, still close to its low for the year. The 10-year’s price fell nine cents to $101.96. Bond prices and yields move in opposite directions.

The bond maturing in 2040 lost 59 cents to $102.21. That nudged the yield to 3.75 percent, up from 3.71 percent. Bond traders don’t expect the Fed to target 30-year bonds if it starts buying more Treasurys.

In other trading, the three-month T-bill paid a 0.11 yield at a discount of 0.12 percent.

Next week, the bond market will be closed Monday for Columbus Day.

will not be displayed