Treasuries Close Slightly Higher But Well Off Best Levels

(RTTNews) - After moving sharply higher early in the session, treasuries gave back ground over the course of the trading day on Friday.

Bond prices pulled back well off their best levels of the day, eventually closing only slightly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.0 basis points to 4.660 percent after hitting a low of 4.603 percent.

Treasuries surged early in the session amid easing concerns about the outlook for interest after the Labor Department released a report unexpectedly showing a modest decrease in U.S. employment in the month of July.

The Labor Department said non-farm payroll employment fell by 23,000 jobs in July after rising by a downwardly revised 20,000 jobs in June.

Economists had expected employment to climb by 88,000 jobs compared to the addition of 57,000 jobs originally reported for the previous month.

While the report points to some weakness in the labor market, the data is also seen as decreasing the chances of the Federal Reserve raising interest rates next month.

According to CME Group's FedWatch tool, the chances the Fed will raise rates by a quarter point next month have tumbled to 44 percent from 55 percent on Thursday and 67 percent a week ago.

However, treasuries pulled back well off their highs as crude oil prices jumped amid uncertainty about the situation in the Middle East.