10-Year Notes Rise on ?Dull? Jobs Report
Today’s Spotlight Market
The U.S. was not the only nation to report its employment data on Friday. Our neighbor to the north, Canada, reported better than expected gains in employment last month, as 42,900 jobs were created in March. In contrast to the U.S., the employment gains were primarily in the public sector, and full time jobs led the advance with just over 30,000 jobs created. The unemployment rate fell to 6.9%, vs. expectations of 7.0%. The positive employment report sent the Canadian Dollar soaring vs. the U.S. Dollar, rising to its highest levels in nearly 6 weeks.
Fundamentals
U.S. employment rose in March, but failed to meet the lofty expectations of traders and analysts. The Labor Department reported that 192,000 jobs were added last month, which was just shy of the 200,000 plus jobs expected. There was some good news on the monthly revisions front, as the payroll figures for January and February were raised by a combined 37,000 jobs. All of the new jobs came from the private sector, as public sector employment continues to struggle. The unemployment rate remained steady at 6.7%. Overall, the market reaction to the employment report was positive for both equities and bonds, however a late morning sell-off in the stock indices took that sector into the red on profit-taking selling after the S&P 500 made new all-time highs. Analysts believe that Friday?s employment data will do little to sway the Federal Reserve from its present course of tapering its bond purchases. In addition, with few signs of inflationary wage pressures occurring, the Fed may also be in no hurry to ponder a short-term interest rate increase, at least not until the pace of employment growth returns to more ?normal? levels.
Technical Notes? -? View Today’s Chart
Looking at the daily chart for 10-year note yields, we notice what may be a head-and-shoulders pattern, which if true, could signal that yields are set to potentially decline. Yields are currently holding right at the 200-day moving average, but a weekly close below this support level could signal further downside potential.? The next support level is seen at 2.65%, with resistance found at 2.82%.
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