Treasuries Gain as Private Report Shows Slower U.S. Jobs Growth

  • Benchmark 10-year note yield declines for a second day
  • Futures show a 10 percent chance of a rate increase by June

Treasuries gained, with the benchmark 10-year note yield near the lowest in two weeks, after a private report showed the U.S. added fewer jobs than forecast in April.

The 30-year bond yield also fell for a second day after data from the ADP Research Institute showed companies in the U.S. added 156,000 jobs in April, below the 195,000 forecast in a Bloomberg survey of economists. Separate data Wednesday are forecast to show factory orders rose, while durable goods were unchanged.

U.S. debt extended a rally started Tuesday when data from China to Europe pointed to a slowing global economy that would need continued central bank support. Two regional Federal Reserve presidents said that an interest-rate increase should be on the table next month, at odds with market expectations that assign it only a 10 percent chance.

"Economic growth has been weaker,” said Tom Tucci, managing director and head of Treasury trading in New York at CIBC World Markets Corp. “There’s a natural underlying bid to the marketplace.”

The yield on the 10-year U.S. Treasury fell one basis point, or 0.01 percentage point, to 1.78 percent at 8:43 a.m. New York time, according to Bloomberg Bond Trader data. The price of the 1.625 percent note due in February 2026 was 98 19/32.

Futures show traders assign a 10 percent probability to a Fed rate increase next month and a 52 percent chance of an increase this year.

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