U.S. Treasuries rally, equity futures drop after jobs data

Fri Apr 3, 2015 12:35pm EDT
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By David Gaffen

NEW YORK (Reuters) - U.S. Treasuries prices rallied, the U.S. dollar fell and stock index futures fell on Friday after weaker-than-expected March U.S. jobs data.

U.S. Labor Department data showed employers added just 126,000 jobs in March, the smallest monthly increase in more than a year. The figure was well below forecasts for a gain of 245,000, according to a Reuters poll of economists.

Bond prices rose sharply, pushing the benchmark 10-year Treasury note yield to its lowest level in about two months, as the expectation for a Federal Reserve interest-rate rise by September diminished.

U.S. equity index futures fell nearly 1.0 percent, with S&P 500 E-mini futures dropping 19.75 points to 2039.75 in thin volume in a 45-minute abbreviated session, indicating a weak open for stocks on Monday.

“The sharply lower-than-consensus job creation for March is a reminder that the U.S. economic recovery is yet to reach escape velocity," said Mohamed El-Erian, chief economic advisor at Allianz Se in Newport Beach, Calif.

Trading was thin on Friday due to the Good Friday holiday, as major U.S. stock exchanges were closed, and the reaction in both U.S. Treasuries and in U.S. equity futures was affected by the light volume.

The benchmark 10-year Treasury rose 20/32 in price to yield 1.845 percent, near a two-month low. The U.S. bond market closed at 1200 ET (1600 GMT).

Major European markets are closed from Friday to Monday for the Easter holiday, reopening on Tuesday. Asian equity markets rallied in thin trading ahead of the Easter holiday and the U.S. jobs figures.   Continued...

Traders work on the floor of the New York Stock Exchange April 2, 2015. REUTERS/Brendan McDermid