Jobs Report  Boosts 10-year Treasury Yields

The yield on the benchmark 10-year Treasury bond climbed on Friday after a slightly softer-than-expected job report was released in the United States for March, which pushed the 10-year yield up.

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A total of 236,000 jobs were added to the American economy in March, a downturn from econometric forecasts of 240,000, as well as a decline from 311,000 jobs that were added in February. It is important to note that wages grew at a slower pace than in February, a constant rate of 4.2% year-over-year.

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As a result of these data, the 10-year yield increased to about 3.37% just before the jobs report was released. Before the jobs report, the 10-year yield was about 3.31%.

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If jobs and wages are weaker than expected, then yields are normally expected to decline as a result. This is caused by a calmer environment for inflation, which in turn could indicate the Federal Reserve may soon be able to stop buying securities in order to slow rising prices. But even so, the 10-year yield ticked higher but it's not entirely surprising considering it was expected.

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Before the recent banking trouble flared up, the yield had already declined from almost 3.9% in early March, just a few days before the problem arose. Bond markets are expecting the potential economic strains caused by the banking issue, as well as an easier central bank, which has caused some economic weakness and a reduced number of rate increases in the bond market. This has made the bond market price to some economic weakness and a reduced number of rate increases.

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