TREASURIES-U.S. yields fall after mixed non-farm payrolls report

BY Reuters | ECONOMIC | 01/06/23 08:57 AM EST

NEW YORK, Jan 6 (Reuters) - U.S. Treasury yields pulled back on Friday, after data showed wage inflation declined in December even though the economy created more jobs than anticipated, affirming expectations that Federal Reserve will continue to raise interest rates but at a slower pace.

Data showed that U.S. nonfarm payrolls rose 223,000 last month. Economists polled by Reuters had forecast payrolls increasing by 200,000 jobs.

Average hourly earnings rose 0.3% in December after 0.4% in the prior month. That lowered the year-on-year increase in wages to 4.6% from 4.8% in November.

In early morning trading, U.S. 10-year yields fell 3.6 basis points (bps) to 3.687%.

U.S. two-year yields slid 5.1 bps to 4.401%. (Reporting by Gertrude Chavez-Dreyfuss)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.