Treasury Prices Recover from Initial Losses

From Standard & Poor's Equity Research

MARKETSCOPE : Long-dated Treasuries finished marginally higher on Friday, as they recovered from initial losses after a bout of U.S. economic data releases.

The benchmark 10-year Treasury note edged up 01/32 to 101-07/32 for a yield of 4.72%. The 30-year bond firmed 02/32 to 94-08/32 for a yield of 4.87%.

News hit that U.S. Nonfarm Payrolls rose 128,000 in August after gaining 121,000 in July, which was revised from 113. The unemployment rate fell back to 4.7% from 4.8%. Average hourly earnings edged up only 0.1% after July's upwardly revised 0.5% pace (from 0.4% before.) Year over year, earnings were up 3.9%, the same as in July.

"This report may keep the Fed on the sidelines this month," says Beth Ann Bovino of Standard & Poor's, New York.

Other economic data releases included U.S. Construction Spending, which fell 1.2% in July after rising 0.4% in June. The U.S. Institute for Supply Manufacturing index dipped to 54.5 in August from 54.7 in July, just under the 55.0 expected.

The National Association of Realtor's Pending Home Sales index plunged 7% in July to 105.6 from 113.9 in June, marking the series' worst decline since 2001. The University of Michigan Consumer Sentiment index rebounded to 82.0 in the final August reading versus the 78.7 in the preliminary print, but was down from 84.7 in July.

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