WASHINGTON (dpa-AFX) - After coming under pressure early in the session, treasuries regained some ground over the course of the trading day on Friday but remained in negative territory.
Bond prices moved back to the downside in the latter part of the trading day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.2 basis points to 4.784 percent.
The ten-year yield jumped as high as 7.812 percent in early trading amid renewed concerns about the outlook for interest rates following the release of much stronger-than-expected U.S. jobs data.
The Labor Department released a closely watched report this morning showing employment increased by much more than expected in the month of August.
The report said non-farm payroll employment surged by 162,000 jobs in August are rising by an upwardly revised 21,000 jobs in July.
Economists had expected employment to climb by 55,000 jobs compared to the loss of 23,000 jobs originally reported for the previous month.
Treasury yields jumped in reaction to the report, as the strong data could make the Federal Reserve more comfortable about raising interest rates later this month in an effort to fight sticky inflation.
According to CME Group's FedWatch Tool, the chances the Fed will raise rates by a quarter point have bounced back to 58.4 percent after falling below 50 percent on Thursday.
Selling pressure waned over the course of the session, however, as several analysts the data does not make a rate hike a foregone conclusion.
'While today's labor report shifted September hike expectations sharply, the outcome is not a sure bet and additional signals that confirm inflation has peaked will make the Fed's decision to hike even tougher at the September meeting,' said Charlie Ripley, Senior Investment Strategist for Allianz Investment Management.
Traders are subsequently likely to pay particularly close attention to next week's reports on consumer and production price inflation in the month of August.
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