US Treasuries saw a dip on Friday after a stronger-than-expected surge in job growth, prompting traders to increase their bets on a Federal Reserve interest rate hike in December. The unexpected rise in employment led to a quick shift in market sentiment, pushing yields higher across maturities.
The two-year Treasury note, which is particularly sensitive to the Fed's rate outlook, saw yields climb as much as seven basis points to 4.54%. While the initial reaction was sharp, yields settled slightly higher by one to six basis points, roughly returning to levels seen just before the jobs data release.
The US economy added 165,000 jobs in October, exceeding forecasts. This unexpected strength in the labor market has reinforced expectations that the Fed may need to take further action to curb inflation when it meets next month.