Bond Market Update

Strong Jobs Report Invites Tumble

• U.S. Treasuries have slid to lows in immediate reaction to the December jobs report (256,000; Briefing.com consensus 154,000; prior 212,000), which showed an unexpected acceleration in hiring activity. The headline beat was combined with in-line average hourly earnings growth (0.3%) and an unexpected dip in the Unemployment Rate (4.1%; Briefing.com consensus 4.2%; prior 4.2%). Manufacturing payrolls decreased by 13,000, making for a blemish in an otherwise strong report that will complicate the case for the next rate cut. Shorter tenors have been at the forefront of the post-data selling with the 2-yr yield returning toward its November high (4.393%) while the 10-yr yield has reached a level not seen since November 2023.
• Yield Check:
  • 2-yr: +10 bps to 4.37%
  • 3-yr: +12 bps to 4.46%
  • 5-yr: +11 bps to 4.58%
  • 10-yr: +10 bps to 4.79%
  • 30-yr: +7 bps to 5.00%