US Treasuries rebound on weak US jobs data

The US Treasuries saw continued upward pressure across much of the curve after data showed that August non-farm payroll came weaker than expected, highlighting that a rate hike in September would be highly unlikely.

The yield on the benchmark 10-year Treasury note fell 1 basis points to 1.566 percent, the yield on 5-year note also dipped 2 basis points to 1.162 percent and the yield on short-term 2-year note slid 2 basis points to 0.770 percent by 12:50 GMT.

The August Labor Department employment situation report revealed a weaker +151k increase in non-farm payrolls, below market expectations for a +180k increase, as compared to the revised +275k result that occurred in July (previous was +255k).

This comes alongside no change in the unemployment rate at 4.9 percent, above expectations for a 4.8 percent result. Despite the weaker than expected headline result, this report shows lingering support for employment conditions.

Nevertheless, maintained improvement needs to be seen in order to alleviate caution on behalf of the FOMC regarding concerns elsewhere. Hence, we see this result as likely to provide enough weight to support the Fed leaving rates unchanged at the September FOMC meeting.

Meanwhile, the S&P 500 Futures traded 7.63 points higher at 2,174.88 by 12:50 GMT.