Jobs Report Sends Bonds Lower

U.S. 10-year Treasury bond prices fell the most in one day
since June, after a jobs report showed that the jobless rate dropped in
September and that more jobs were added in previous months than had been
previously reported. Bond prices have been on the rise since the end of
June, when the Fed decided to keep rates at 5.25%, and rose even further when
the Fed continued the pause in September. With a strong jobs number out,
investors have begun to bet that the Fed will not have to cut rates any time
soon, which could lead to a sell-off in long-term bonds.

After the jobs report, the dollar rallied the most against the
yen and the euro since July. Investors saw strength in the dollar, in a
market dominated by interest rates and inflation talk. The yen has been
weak through the summer, as prospects for a rate hike have become weaker with
economic data suggesting a limp Japanese economy. The ECB lifted rates
this week, but made vague statements concerning the prospects for hikes in the
coming year. Investors have feared that the U.S. Fed could face rate-cuts,
as economic reports continue to come in showing a weak economy. With the
strong jobs number today, however, investors saw strength in the dollar,
spurring a rally against the yen and the euro.

Crude oil futures fell 0.4% to close at $59.76 a barrel today,
as OPEC continues to mull possible cuts in global output. Nigeria,
Venezuela and a slew of Middle-Eastern countries have all announced the
possibility of cutting their output, in an effort to contain the falling price
of crude. Crude has fallen nearly 25% from its record highs in July.
Natural gas futures rose 2% as cold weather forecasts gave investors some demand

Gold futures rose 0.2% as investors looked for a safe-haven
amidst escalating tensions between the global community and North Korea.
Investors look for safety in the commodities during global crisis situations,
and this helped to erase gold’s early decline, which was spurred by oil’s
decline. Copper rose 2.7% on speculation that global demand will wipe out
inventories for the metal, which is crucial in homebuilding.

Softs fell today. Cocoa fell 1.6%, coffee fell 0.6%,
orange juice fell 3.4% and sugar fell 0.6%.

Grains mostly fell today. Corn fell 0.3%, wheat was
flat, soy fell 0.3%, and oats rose 1.4%.

Meats fell today, with cattle down 0.4% and porkbellies down


September Employment Growth Comes In Weaker Than Expected (full

John Patrick Lee