Treasury yields are in focus after strong job growth data

U.S. Treasury yields fell on Monday after unexpectedly robust jobs data raised the likelihood of an aggressive rate hike by the Federal Reserve.

The benchmark 10-year Treasury yield fell 4 basis points to around 2.7993%, while the 30-year Treasury yield fell 2 basis points to 3.0383%. Yields move inversely with prices and the basis point is equal to 0.01%.

This comes after economic data released on Friday showed that US job growth exceeded expectations in July.

The data showed that nonfarm payrolls rose by 528,000 last month, beating Dow Jones expectations of 258,000. At the same time, wage growth picked up, with average earnings rising 0.5% for the month and 5, 2% compared to last year.

The stronger-than-expected report boosted prospects for an aggressive rate hike by the Federal Reserve and showed the US is probably not in recession. Analysts expect the Fed to consider raising interest rates by 75 basis points at its upcoming meetings to reduce rising inflation to its target.

Market participants are likely to keep a close eye on inflation data due later in the week for further guidance on the US central bank’s rate.

On Monday, the US Treasury will auction $54 billion in 13-week bills and $42 billion in 26-week bills.

— CNBC’s Carmen Reinicke and Silvia Amaro contributed to this report.

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