WASHINGTON (dpa-AFX) - Treasuries moved sharply higher during trading on Friday, extending the modest upward move seen over the course of the previous session.
Bond prices surged early in the session and remained firmly positive throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, plunged 14.0 basis points to 4.220 percent.
With the steep drop on the day, the ten-year yield tumbled to its lowest closing level in three months.
The spike by treasuries came after the Labor Department released a report showing much weaker than expected job growth in the month of July.
The Labor Department said non-farm payroll employment rose by 73,000 jobs in July, while economists had expected employment to jump by 110,000 jobs.
The report also showed much larger than normal downward revisions to job growth in May and June, with employment in the two months increasing by a combined 258,000 fewer jobs than previously reported.
With the downward revisions, employment in May edged up by 19,000 jobs, while employment in June crept up by 14,000 jobs.
The Labor Department also said the unemployment rate inched up to 4.2 percent in July from 4.1 percent in June, with the uptick matching expectations.
The weaker than expected jobs data led to some concerns about the strength of the job market and increase optimism about a potential interest rate cut by the Federal Reserve in September.
'Powell is going to regret holding rates steady this week,' said Jamie Cox, Managing Partner for Harris Financial Group. 'September is a lock for a rate cut and it might even be a 50-basis point move to make up the lost time.'
Treasuries also benefitted from their appeal as a safe haven amid concerns about the economic impact of President Donald Trump's tariffs, as the White House announced new tariff rates on dozens of countries.
The new tariffs range from just 10 percent to as high as 41 percent, and the White House said a 40 percent levy will be imposed on goods that have been transshipped to evade applicable duties.
Following a busy week on the U.S. economic front, the calendar is relatively quiet next week, although reports on factory orders and service sector activity may attract some attention. Traders are also likely to keep an eye on any further developments on the tariff front.
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