Bond prices move in the opposite direction of yields.
Average hourly earnings rose 0.3% after gaining 0.4% in December, bringing the year-on-year increase in wages to 4.4% from 4.8% the month before.
Job growth and wages are the chief concerns for the Fed in its attempt to lower inflation down to its 2% target rate after inflation surged to 40-year highs last year. "Even with stronger than expected headline numbers, we saw wage growth come down," said Sam Millette, Fixed Income Strategist for Commonwealth Financial Network.
"There are some signs of a sort of Goldilocks scenario for the Fed here where they aren't seeing the large increase in unemployment that's associated with tighter monetary policy, but they are seeing wage growth starting to slow."
Non-farm payrolls surged 517,000 jobs last month. Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs and wages advancing 4.3% year-on-year. The unemployment rate fell to 3.4% from December's 3.5%.
A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes , seen as an indicator of economic expectations, was at -75 basis points.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 15.9 basis points at 4.249%.
February 3 Friday 9:29AM New York / 1429 GMT
Price Current Net
Yield % Change
(bps)
Three-month bills 4.55 4.6645 0.025
Six-month bills 4.66 4.8362 0.051
Two-year note 99-200/256 4.2408 0.151
Three-year note 99-232/256 3.9083 0.144
Five-year note 99-110/256 3.626 0.143
Seven-year note 99-136/256 3.5764 0.136
10-year note 105-4/256 3.5135 0.115
20-year bond 103-68/256 3.764 0.095
30-year bond 106-188/256 3.628 0.073
DOLLAR SWAP SPREADS
Last (bps) Net
Change
(bps)
U.S. 2-year dollar swap 26.50 -1.25
spread
U.S. 3-year dollar swap 15.50 0.25
spread
U.S. 5-year dollar swap 6.25 -1.00
spread
U.S. 10-year dollar swap -1.75 -1.00
spread
U.S. 30-year dollar swap -36.50 -1.50
spread
(Reporting by David Randall; Editing by Arun Koyyur)
