Bond Market Update

Weak Jobs Report Invites Rally

• U.S. Treasuries have rallied strongly in reaction the weak jobs report for August, which showed that Nonfarm Payroll growth decelerated to just 22,000 from 79,000 in July while the Unemployment Rate ticked up to 4.3% from 4.2%. Average hourly earnings increased an in-line 0.3%, but the year-over-year growth rate decelerated to 3.7% from 3.9%. Altogether, the report has cemented the market's expectations for a 25-basis point rate cut on September 17 and it is likely that there will be some speculation about a 50-basis point cut being announced.
• Yield Check:
  • 2-yr: -11 bps to 3.48%
  • 3-yr: -11 bps to 3.44%
  • 5-yr: -11 bps to 3.55%
  • 10-yr: -10 bps to 4.08%
  • 30-yr: -8 bps to 4.79%