Treasury returns in focus after strong job growth figures

Treasury yields fell Monday after unexpectedly robust jobs data increased the likelihood of aggressive rate hikes by the Federal Reserve.

The benchmark 10-year Treasury yield declined 4 basis points to approximately 2.7993%, while the 30-year Treasury yield declined 2 basis points to 3.0383%. Yields move inversely to prices and a basis point equals 0.01%.

That comes after economic data released Friday showed US job growth surpassed expectations in July.

The data showed that nonfarm payrolls rose 528,000 last month, surpassing Dow Jones expectations of 258,000. At the same time, wage growth picked up, with an average increase of 0.5% for the month and 5.2% year-on-year.

The stronger-than-expected report reinforced the prospect of aggressive rate hikes by the Federal Reserve and showed that the US is unlikely to be in a recession. Analysts expect the Fed to consider a 75 basis point rate hike at its upcoming meetings to push rising inflation back to its target.

Market participants are likely to keep a close eye on inflation data expected later in the week for further clues about US central bank movements.

The US Treasury Department will auction $54 billion in 13-week notes and $42 billion in 26-week notes on Monday.

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

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