The 10-year Treasury yield closed Friday at 5.28%, up 4 basis points. Payrolls rose just 29,000 against an 84,000 consensus.
That close sits above the 5.26% of June 2007 and the 5.27% of May 2002. It is roughly a 24-year high, set on a jobs miss.
The reversal
The 10-year traded near 5.18% after the 8:30 a.m. release, down about 6 basis points. It finished 10 basis points above that low.
The 2-year rose 5 basis points to 4.83%. That came as CME FedWatch odds of an October hike fell to 16% from 64% a week earlier.
Front-end selling against collapsing hike odds is consistent with inflation worry, with CPI at 3.4%. Today's inflation-sensitive data lands on a bond market already leaning that way.
Stocks took the other reading
The Nasdaq rose 1.19% to 27,190.86 and the S&P 500 gained 0.73% to 7,722.72. Nvidia hit an intraday record of $237.88, lifting its value past $5.7 trillion.
Equities priced in the lower hike odds. Bonds priced in the inflation.
The S&P still finished the week up just 0.01%, and the VIX fell 6.6% to 15.31. A 5.28% discount rate leaves a calm VIX with little cushion if yields climb again.
Oil below $100
WTI fell 3.75% to $89.39 and Brent dropped 2.34% to $99.92. Kitco linked the slide to talk of strategic reserve releases, with the Strait of Hormuz still carrying a risk premium.
Cheaper crude eases one inflation channel, yet yields climbed anyway. That makes oil a weaker relief valve for bonds than its 1.5% weekly drop suggests, with Brent's $100 handle the line energy desks inherited this morning.
Gold loses its bounce
Spot gold slipped 0.83% to $4,142, giving back its post-payrolls gain. CNBC had the metal on track for a second straight weekly loss.
The same 5.28% yield that pressured bonds raises the cost of holding a metal that pays nothing. Kitco puts support at $4,110.87, about 30 dollars below Friday's close.
The day ahead
ISM services prints at 10:00 a.m. ET, with consensus at 55.7 against August's 55.4.
The prices paid index matters more this morning. It read 72.6 in August, and a hotter number would line up with Friday's bond selling.
Employment, at 47.8 in August, is the cross-check on 29,000 payrolls. A second weak labor read would test whether the 10-year can hold above its 2007 close of 5.26%.
The rest of the week is light until Wednesday's Fed minutes and PepsiCo's results Thursday.
