Bonds Beat Up on Surprisingly Strong Jobs Data

The April Employment Situation Report has been released.

Nonfarm payroll employment rose by 244,000 in April, and the unemployment rate edged up to 9.0 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in several service providing industries, manufacturing, and mining.

Reuters Quick Recap...

RTRS - U.S. APRIL NONFARM PAYROLLS +244,000 (CONSENSUS +186,000) VS MARCH +221,000 (PREV +216,000), FEB +235,000 (PREV +194,000)

RTRS - US APRIL PRIVATE SECTOR JOBS +268,000 (CONS +200,000), MARCH +231,000 (PREV +230,000)

RTRS - U.S. APRIL GOVERNMENT JOBS -24,000 VS MARCH -10,000 (PREV -14,000)

RTRS - U.S. APRIL JOBLESS RATE 9.0 PCT (CONSENSUS 8.8 PCT) VS MARCH 8.8 PCT (PREV 8.8 PCT)

RTRS - U.S. APRIL AVERAGE HOURLY EARNINGS ALL PRIVATE WORKERS +0.1 PCT (CONS +0.2 PCT) VS MARCH +0.2 PCT (PREV 0.0 PCT), TO $22.95 VS MARCH $22.92; APRIL YEAR-ON-YEAR EARNINGS +1.9 PCT

RTRS - U.S. APRIL AVERAGE WORKWK ALL PRIVATE WORKERS 34.3 HRS (CONS 34.3 PCT) VS MARCH 34.3 HRS (PREV 34.3), FACTORY 40.4 VS 40.4, OVERTIME 3.3 VS 3.2

RTRS - U.S. APRIL FACTORY JOBS +29,000 (CONS. +19,000) VS MARCH +22,000 (PREV +17,000)

RTRS - U.S. APRIL GOODS-PRODUCING JOBS +44,000, CONSTRUCTION +5,000, PRIVATE SERVICE-PROVIDING JOBS +224,000, RETAIL +57,100

RTRS - U.S. APRIL AGGREGATE WEEKLY HOURS INDEX FOR ALL PRIVATE WORKERS +0.3 PCT VS MARCH +0.2 PCT RTRS - U.S. APRIL PRIVATE SECTOR JOB INCREASE LARGEST SINCE FEB

Market Reaction...

Knee-Jerk Risk On!

Equity traders are waving in new longs (buying) and Treasury investors are setting new short positions in size (sell-off). Volume was huge as the data flashed.

S&P futures jumped from 1338 to 1346 in the blink of an eye. The 10yr note yield spiked 5bps to 3.24%. And the FNCL 4.5 dipped from 103-14 to 103-06.

Rate sheets s/be about 25bps worse on first run.

This opens the door for traders to price-in an auction concession for next week's round of TSY issuance. Let's see if this "risk on" sentiment lasts....