October payrolls beat forecasts and revived bets on a December Fed hike, lifting short-term yields while longer bonds held near Friday’s levels.
MoneyTurkey Bonds Desk | 9 November 2026
Key points
- As of about 15:05 London on Monday, the 10-year Treasury yield was near 4.85%, the 2-year near 4.54% and the 30-year near 5.25%, little changed after Friday’s jump on the jobs report.
- October non-farm payrolls rose 165,000 versus about 59,000 expected, and the unemployment rate fell to 4.1%, according to CNBC and Investing.com.
Treasury yields rose on Friday after a stronger-than-expected October jobs report, then held near those levels on Monday as traders awaited Tuesday’s inflation print. CNBC reported the 10-year yield higher in Monday morning New York trade, while Investing.com later showed the benchmark little changed near 4.85% with the 2-year around 4.54%. Markets had bid up bonds into last week’s midterm elections on expectations of slower growth, but the jobs data challenged those forecasts.
What happened
The US Treasury market pared a steep weekly advance after the October employment data revived wagers on a Federal Reserve interest-rate hike in December. A sharp selloff in large US technology shares and lower oil prices earlier in the week had fuelled gains for US government bonds, sending yields toward the lowest levels since early September. That move stalled on Friday as equities stabilised and the jobs data further challenged forecasts of an economic slowdown.
Only short-term yields — more sensitive to the outlook for the Fed’s rate path — remained firmly higher as traders priced in slightly higher chances that the next decision in December will be a quarter-point hike.
What is moving yields
The monthly non-farm payrolls report showed an increase of 165,000 jobs in October, far outweighing the roughly 59,000 expected by economists, while the unemployment rate dipped to 4.1%. Florian Ielpo, head of macro at Lombard Odier Investment Managers, said the strong jobs data is a reminder that AI is not the economy and that the report confirms economic strength highlighted by the Fed, nearly sealing the case for a December rate hike, according to The Business Times.
Swap contracts linked to future Fed moves priced in about 20 basis points of tightening for the next decision in December, up from levels before the jobs data, The Business Times reported. San Francisco Fed president Mary Daly, speaking after the employment data on Friday, said a solid job market gives the Fed latitude to raise rates further.
Why it matters
George Goncalves, head of US macro strategy at MUFG, said the Treasury market’s tolerance for the robust jobs report suggests investors are applying a new lens to economic data after the election flipped control of Congress, according to The Business Times. Concerns around the sustainability of capital spending on artificial-intelligence infrastructure contributed to a rotation into bonds earlier in the week, when the Nasdaq 100 index fell 6.4% in its biggest daily drop since March 2020, the same report said.
On Friday the two-year yield rose as much as nine basis points before retreating, while the Nasdaq 100 index later gained, The Business Times reported. St Louis Fed president Alberto Musalem said policymakers are mindful of the risk that the AI investment boom will contribute to higher inflation in the near term.
What to watch
- Tuesday CPI release: headline expected near 3.9%, core near 2.8%
- PPI data later in the week for an early inflation read
- Fed speakers on growth and the rate path
- Energy prices: West Texas Intermediate futures were down more than 3% toward $87 a barrel in source reports tied to the same session
Related on MoneyTurkey
- Fed’s Daly says more rate hikes likely, keeping December in play for Treasuries
- October Jobs Beat Sends Treasury Yields Higher
For information only. Not investment advice.
