FX.co ★ Treasury Yields Turn Lower After Weak US Jobs Data

The yield on the US 10-year Treasury note gave up earlier gains and fell to 4.12% on Friday, after unexpectedly weak labor market and retail sales data deepened concerns about the US economy’s momentum. The economy unexpectedly shed 92K jobs last month, and the unemployment rate ticked up to 4.4%, while retail sales slipped 0.2%. Those figures prompted traders to increase wagers on Federal Reserve rate cuts this year. Market pricing now implies nearly a 48% probability of a rate cut in July, and a 25 bps reduction in September is fully priced in. Earlier in the session, yields had been climbing on renewed inflation worries driven by a rally in energy prices. Even with the subsequent retreat, the benchmark 10-year yield remains roughly 14 basis points higher for the week.