Jobs news sends bond yields higher

Prices on government bonds were down on Friday and yields were up after new data from the US Labor Department showed that more jobs were created in December than had been expected. While a private report earlier in the week said that private sector employment was down, the Labor Department said that 167,000 new jobs were created in Decmeber. Analysts had predicted around 100,000 new jobs.

By late morning trade in New York, the two-year Treasury bond was 8.3 basis points higher to a yield of 4.79 percent, while ten-year issues were up 6.2 basis points to 4.67 percent. Still, yields were lower than at the beginning of the week, when two-year bonds were yielding 4.70 percent and ten-year bonds were at 4.81 percent.

Eurozone bonds were affected by the US news after prices had been up earlier. The two-year Schatz added 2.8 basis points on the day and the same amount on the week to a yield of 3.918 percent. The ten-year Bund added 4.5 basis points on the session to a yield of 3.979 percent, a gain of 2.6 basis points for the week.

UK gilts also saw prices decline, even though new data showed that the price of houses fell unexpectedly in December. The two-year gilt added 3 basis points on the session and 5.4 basis points for the week to yield 5.221 percent, while the ten-year gilt was yielding 4.804 percent, up 2.9 basis points on the day and 6.6 basis points over the week.

In Japan, meanwhile, the ten-year Japanese government bond gained 0.5 basis points and was yielding 1.720 percent.

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