June 7, 2019 Bonds up Big; Jobs Not by Lester Murray

Being disappointed about a 3.6% Unemployment Rate might not seem like the reaction one might expect, but if one is expecting 175k new jobs and one only gets 75k; disappointment ensues. Rather than disappointment, though, the reaction is more like a confirmation of sorts. Confirmation that the dovish remarks earlier in the week by a variety of Fed officials would not be undone by a blowout report from the BLS. Rest assured, they won't be.

The unexpectedly low Non-Farm Payrolls count has bond investors bidding up prices and pushing down yields in anticipation of rate-cut(s) on the way. Average Hourly Earnings came in slightly improved with a 3.1% year-over-year growth rate. The Labor Force Participation Rate was unchanged at 62.8%.

Ten-Year Treasury Notes are up about a half-point in price, producing a yield of around 2.05%.  The Two-Year is just under 1.80%, and 90-day bills have fallen to around 2.25%.