US Treasury bonds declined after an unexpectedly sharp acceleration in US job growth prompted traders to increase bets that the Federal Reserve will raise interest rates at its December meeting.
Yields rose across maturities, with the two-year Treasury yield, which is more sensitive to the outlook for the Fed's rate path, climbing as much as 7 basis points to 4.54%. The 10-year Treasury yield rose 4 basis points to 4.87%.
Data showed that the US added 165,000 jobs in October, above expectations. Traders maintained expectations for further Fed rate hikes, with the market pricing in a 70% probability of a 25 basis point increase next month. Overall, the market expects the Fed to raise rates by at least another 40 basis points by the end of September 2027.
Nonfarm payrolls increased by 165,000 in October, far exceeding the expectation of 65,000, while the unemployment rate fell to 4.1%. Data from previous months were revised upward, and wage growth accelerated to 3.1% over the past year.
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