US economy

Treasury yields whipsaw, stock futures jump after jobs report


Treasury yields, which move inversely to price, whipsawed on Friday morning as investors digested the latest jobs report which saw wage growth hold steady despite a sharp slowdown in hiring in November.

The benchmark 10-year treasury yield initially dropped 2 basis points to 2.88 per cent after the numbers were released. However they quickly recovered to trade 3 bps higher at 2.90 per cent.

The two-year yield, which is more sensitive to Federal Reserve monetary policy, had dipped 1 basis point to 2.75 per cent before recovering to trade largely unchanged at 2.768 per cent.

US stock futures swung back into the black. Futures for the S&P 500, Dow Jones Industrial Average and the Nasdaq 100 were all up 0.2 per cent. They had traded down by as much as 0.5 per cent ahead of the release.

The US dollar — as measured by the DXY index — dropped 0.2 per cent.

Peter Tchir, chief macro strategist at Academy Securities, said the numbers were, “enough to give the Fed more caution about their current trajectory,” but, “not bad enough to get the ‘recession’ drumbeat going.”

“Any points of weakness in the US economy is likely to further entrench investor concerns around US stocks,” said Kully Samra, a vice-president at Charles Schwab. “The Fed has admittedly taken a more dovish stance and admitted the path of future rate hikes will be determined by the data, however there is still a nervousness that too many hikes too fast could be a monetary mistake.”



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