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TREASURIES-Yields fall in choppy trading after jobs data
October 7, 2016 / 1:57 PM / a year ago

TREASURIES-Yields fall in choppy trading after jobs data

(Adds details on next week's data, updates prices)
    * Sept job gains below expectations; Aug revised up
    * Traders reduce expectations of November rate hike
    * Yellen speech next week in focus
    * Bond market closed on Monday

    By Karen Brettell
    NEW YORK, Oct 7 (Reuters) - U.S. Treasuries fell slightly on
Friday in choppy trading after data showed that U.S. employment
growth unexpectedly slowed in September but was stronger than
initially reported in August.
    Nonfarm payrolls rose by 156,000 jobs in September, missing
economists' expectations of 175,000. Job gains for August were
revised up to 167,000 from an initially reported 151,000.
    "The numbers were slightly worse, but the revisions brought
it back in line, so all in all, it was fairly close to
expected," said Justin Lederer, an interest rate strategist at
Cantor Fitzgerald in New York.
    Benchmark 10-year notes were last up 5/32 in
price to yield 1.73 percent. The yields have increased from 1.53
percent last Friday.
    Traders reduced expectations that the Federal Reserve will
raise U.S. interest rates in November, lowering the probability
to 9.3 percent after the data from 15.5 percent before,
according to the CME Group's FedWatch Tool.
    Expectations of a December rate hike have increased to 65.6
percent from around 64 percent before the jobs report, the CME
data shows.
    Investors will next turn attention to Fed Chair Janet
Yellen's speech at a Boston Fed economics conference on Oct. 14
for any new indication on when a rate hike may be likely.
    Retail sales data next Friday, before Yellen's speech, will
also be watched for a further indication on the economy's
    The Treasury will sell $56 billion in coupon-bearing supply
next week, including $24 billion in three-year notes, $20
billion in 10-year notes and $12 billion in 30-year bonds.
    The bond market will be closed on Monday for the Columbus
Day holiday.

 (Editing by Bernadette Baum and Lisa Von Ahn)

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