The U.S. Treasury market saw notable moves Friday as April's employment data exceeded market expectations, pushing yields higher across the board. The benchmark 10-year Treasury yield climbed more than 7 basis points to 4.308%, while the 2-year Treasury yield rose over 12 basis points to 3.828%.
The Bureau of Labor Statistics reported that nonfarm payrolls increased by 177,000 jobs in April, substantially surpassing the Dow Jones estimate of 133,000. While slightly below March's revised figure of 185,000, the robust job growth helped ease concerns about economic headwinds. The unemployment rate remained steady at 4.2%, pointing to continued strength in the labor market.
"Employment, at least through April, looks pretty strong," noted Rhys Williams, chief investment officer at Wayve Capital. The better-than-anticipated jobs data dispelled worries about rising unemployment levels.
The strong employment figures are shaping expectations for upcoming Federal Reserve decisions. Markets now anticipate the Fed will maintain current interest rates, which stand at 4.25% to 4.50%, during both its May 6-7 meeting and the following session. Traders have pushed back expectations for the next potential rate adjustment to July, according to CME Group's FedWatch Tool.
Adding to market optimism, China's commerce ministry announced it is considering renewed trade discussions with the United States following outreach from senior U.S. officials. However, Chinese authorities emphasized their position that U.S. tariffs, currently at 145%, must be removed to rebuild trust between the nations. China has maintained retaliatory tariffs of 125% on U.S. goods.