U.S. Treasuries recover on upbeat labor market report; FOMC meeting in focus

The U.S. Treasuries recovered Monday as investors covered previous short positions after reading upbeat labor market report on Friday. Also, investors are eyeing the Federal Open Market Committee’s (FOMC) monetary policy meeting, scheduled to be held on March 15-16 for detailed direction in the money market.

The yield on the benchmark 10-year Treasury fell 1 basis point to 2.57 percent, the super-long 30-year bond yield slipped 1-1/2 basis points to 3.15 percent and the yield on short-term 2-year note traded nearly 1 basis point lower at 1.35 percent by 11:40GMT.

US non-farm payrolls rose 235,000 for February, significantly above consensus expectations of around 195,000 for the month. The January data was revised up to 238,000 from the original figure of 227,000 and the three-month moving average increased to 209,000 from 186,000.

Further, private payrolls rose 227,000 for the month after a 221,000 increase for January with a small 8,000 gain in government jobs. Also, unemployment fell to 4.7 percent from 4.8 percent which was in line with market expectations as the participation rate edged higher to 63.0 percent from 62.9 percent.

Lastly, the stream of rhetorics from Fed officials at the end of last week hinted very strongly that the Fed Funds interest rate would be increased at the March meeting this week unless there was a very weak employment report. Therefore, the central bank looks certain to move ahead with the rate hike this month given a strong report. If employment growth continues at this pace, there will also be increased expectations of another increase in June, reports said.

Meanwhile, the S&P 500 Futures fell 0.03 percent or 0.25 points to 2,368.00 by 11:40GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained highly bearish at -118.02 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex