U.S. employers unexpectedly cut payrolls in July, denting expectations for further Fed tightening and sending Treasuries higher. The two-year Treasury yield, most sensitive to Fed policy, fell 8bp to 4.16% on Friday as markets trimmed odds of near-term hikes. The 10-year yield declined 6bp to 4.62%. BLS data showed nonfarm payrolls fell 23,000 in July, with substantial downward revisions to the prior two months. The unemployment rate eased to 4.1% while the labor force participation rate continu

U.S. employers unexpectedly cut payrolls in July, denting expectations for further Fed tightening and sending Treasuries higher. The two-year Treasury yield, most sensitive to Fed policy, fell 8bp to 4.16% on Friday as markets trimmed odds of near-term hikes. The 10-year yield declined 6bp to 4.62%. BLS data showed nonfarm payrolls fell 23,000 in July, with substantial downward revisions to the prior two months. The unemployment rate eased to 4.1% while the labor force participation rate continued to decline. Market participants said the report reduced the likelihood of a Fed rate increase in September.