Bonds round-up: US jobs shock sends Treasuries higher
US bonds rose on a much worse than expected non-farm payrolls figures for March. The US economy shed 80,000 jobs over the month, up from the 76,000 lost in February and suggesting it is deep in the mire. The jobless rate rose to 5.1% from 4.8%.
Yields on two-year notes tumbled as investors predicted a cut in US interest rates of as much as a half-percentage point this month, especially as hourly wage inflation rose by the smallest amount since March 2006, suggesting inflation is benign.
Two-year note yields fell 7 basis points to 1.84%, while the hourly earnings figures sent 10-year bond yields down 9 basis points to 3.59%, the biggest drop since 19 March.
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Futures suggest it is a certainty that the US Federal reserve will cut rates at its next meeting on 30 April, the only issue being whether it will be half or a quarter point.
European bonds and gilts also rallied on the US jobs figures. Ten-year bund yields eased nearly 4 basis points to 3.94%. In London, benchmark 10-year gilts were down slightly at 4.44%.
