FX.co ★ Treasury Yields Soar After NFP

The yield on the US 10-year Treasury note increased by nearly 7 basis points to 4.45% on Friday. This followed a jobs report indicating a cooling yet resilient labor market, slightly dampening the anticipation of forthcoming rate cuts by the Federal Reserve. In the past month, the US economy added 137,000 jobs, which modestly surpassed predictions. However, figures from the preceding two months saw significant downward revisions. The unemployment rate remained unchanged at 4.2%, aligning with expectations, while average hourly earnings experienced a rise of 0.4%, exceeding the anticipated 0.3%. This data further supports the Federal Reserve's cautious approach to maintaining existing interest rates. Consequently, the probability of a rate cut in September decreased to approximately 75%, down from full certainty earlier in the week. Simultaneously, markets kept a close watch on trade tensions, as a conversation between President Trump and Chinese President Xi revealed limited substantial outcomes.