NEW YORK: US Treasuries prices gained on Friday after data showed that US employers maintained a solid pace of hiring in May, with job additions coming in as economists expected, and as falling yields on European bonds made US debt relatively attractive.
Nonfarm payrolls increased 217,000 last month, the Labor Department said on Friday, returning employment to its pre-recession level and offering confirmation the economy has snapped back from a winter slump. Economists polled by Reuters had expected employment to increase 218,000 last month.
The unemployment rate held steady at a 5-1/2 year low of 6.3 percent even as some Americans who had given up the search for work resumed the hunt. That was because there was an increase in household employment.
"The numbers across the board came in very much as expected," said Dan Mulholland, managing director in Treasuries trading at BNY Mellon in New York.
Benchmark 10-year notes were last up 9/32 in price to yield 2.55 percent, down from 2.58 percent late on Thursday.
Treasuries were also favored as Italian, Spanish and Irish bond yields fell to record lows, a day after the European Central Bank cut all its main rates to record lows, imposed negative interest rates on overnight bank deposits and outlined a new long-term loan program for banks to promote lending to small and mid-sized businesses.
The rally in European debt pushed yields on Italian and Spanish debt closer to those offered by Treasuries, which are considered a much lower risk, making the US bonds more attractive by comparison.
"It's going to be hard for the Treasury market to selloff a whole lot given where peripheral European debt is at the moment," said Mulholland.
Ten-year Spanish bond yields fell to 2.62 percent, and Italian bond yields dropped to 2.73 percent. Irish government bonds paid less than comparable Treasuries for a second day, with 10-year yields dropping to 2.43 percent.
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