Treasury Futures Tread Water after Jobs Data

October 7, 2016 5:37AM CDT

The Treasury sector of commodities futures markets is treading water after weaker-than-expected monthly data on the U.S. labor market.

The December contract in 10-year note futures rose a subdued .10 percent to 130-025 after the September Employment report showed an improvement in the labor market, but failed to meet expectations of most participants in the commodities futures markets.

The December contract for 30-year Treasury bond futures was up .11 percent at 165-08. The U.S. economy added 156,000 jobs in September, while the unemployment rate rose to 5 percent, according to the U.S. Department of Labor. Economists had widely expected an addition of 176,000 new jobs and the jobless rate to hold at 4.9 percent. Average rose six cents to an annualized rate of 2.6 percent and the average work week crept one-tenth higher to 34.4 hours per week.

After the report, the probability for a Fed move during its last meeting of the year rose from 63.9 percent before the release to 70.2 percent afterwards, according to the Chicago Mercantile Exchange's fed funds futures tracker. Commodities futures analysts say the Fed also has the Nov. 8 presidential election to consider before hiking rates.

Friday also brings speeches from several Federal Reserve members, including Cleveland Fed President Loretta Mester, who spoke shortly after the jobs report was release. Mester reiterated that the government's weaker-than-expected employment report for September is strong enough for the Fed to consider increasing interest rates this year. Mester is also scheduled to give separate remarks about Fed communications at 11:45 p.m. CT.

Also of note to the commodities futures markets, Fed Vice Chair Stanley Fischer will speak at 9:30 a.m. CT on the economy and financial regulation, while Kansas City Fed President Esther George is due to talk about the U.S. economic outlook at 2:00 p.m. CT.

Friday also brought the August Wholesale Inventories report, which showed a drop of 0.2 percent as businesses ran through stocks of farm goods and clothes, according to the U.S. Department of Commerce. Economists expected the number to be unchanged from the prior month.

The August Consumer Credit report is due this afternoon.

10 yr Treasury Daily

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