Treasuries move up

US Treasuries prices rose on Thursday, rebounding from the prior day's selloff, as data showed an improving labour market cooled in June, raising doubts whether the Federal Reserve would end its near-zero interest rate policy later this year. The government said US employers hired 223,000 workers last month, less than the 230,000 increase forecast by economists polled by Reuters.
It also downgraded its reading on April and May job increases, resulting in 60,000 fewer jobs created than previously reported. The latest report also showed an absence of wage gains, which analysts say would disappoint the Fed which has counted on growing paychecks to help support consumer spending and its 2 percent inflation target.
"The biggest disappointment was in wages. This set back the progress we had been seeing," said Jeffrey Rosenberg, chief investment strategist for fixed income at New York-based BlackRock, the world's biggest asset manager. US interest rates futures rose after the June payrolls report, suggesting traders priced out the chances of a Fed rate increase this year. On the other hand, some economists said the latest data were not so dismal. The Fed may still raise rates in September if momentum in the jobs market reaccelerates this summer.
Benchmark 10-year Treasuries notes were up 7/32 in price, erasing losses before the payrolls data. The 10-year yield was last 2.391 percent, down 3 basis points from late on Wednesday and down 8 basis points on the week. Yields on most other issues were down 2 to 6 basis points, while the 30-year yield was flat on the day. Meanwhile, traders who were worried about Greece's referendum on Sunday on bailout terms bought safehaven US government debt ahead of a three-day weekend.
US financial markets will close on Friday to observe the Fourth of July holiday. Greek Prime Minister Alexis Tsipras on Wednesday urged voters to reject the deal in an effort to force lenders to loosen austerity terms, while Eurogroup chair Jeroen Dijsselbloem said on Thursday a 'no' vote would not strengthen Greece's negotiation stance to clinch a reform-for-cash deal. Investors hope most Greek voters would vote 'yes' on Sunday as this would signal the country won't exit the euro zone. Traders fear Greece leaving the economic bloc and common currency would roil financial markets. "The Greek referendum outcome could be a big deal next week. The effect could be dramatic but temporary," said Don Ellenberger, head of multi-sector strategies at Federated Investors in Pittsburgh.