Treasurys cheer jobs report
Prices for U.S. debt rise as investors cheer a much lower-than-expected monthly job loss total. Borrowing rate hits fresh all-time low.
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| Click the chart for current bond prices and yields. |
NEW YORK (CNNMoney.com) -- Treasury prices rose modestly Friday morning as investors were encouraged by a better-than-expected monthly jobs report, while a key borrowing measure reached its fourth-straight record low.
The Labor Department reported the economy shed 539,000 jobs in April, much less than the 699,000 jobs lost in March and lower than economists' consensus forecast of 600,000. In a separate survey, the nation's unemployment rate rose to a 25-year high of 8.9% in April, as expected.
Bonds also edged up after federal officials said Thursday that ten of the nation's 19 largest banks will need to raise a total of $74.6 billion in capital to absorb additional losses if the economy weakens further.
Thursday's announcement came as a relief to many investors after weeks of speculation surrounding the outcome of the government's so called bank stress tests.
Still, bondholders remained concerned about the record amount of debt the U.S. government has issued to fund, among other things, its various economic stimulus and financial rescue programs.
The Treasury sold $14 billion worth of 30-year bonds Thursday in the last of three auctions this week totaling $71 billion. That's on top of the $101 billion worth of Treasurys sold last week.
The 30-year auction received nearly $30 billion worth of bids for the $14 billion offered. That made for a bid-to-cover ratio of 2.14, versus 2.02 in February's auction.
While demand for U.S. debt has remained relative healthy, many analysts say the ongoing influx of supply will weigh on prices as the economy recovers and investors seek higher returns in more risky assets.
Stock futures were higher, suggesting a stronger opening when trading begins in New York. European shares rose in morning trading, led higher by bank stocks.
Bond prices: The benchmark 10-year note was up 4/32 to 98-10/32 and its yield rose to 3.32%. Bond prices and yields move in opposite directions.
The 2-year note was up 1/32 to 99-25/32, and its yield held steady at 1%.
The newly auctioned 30-year bond slid 1-2/32 to 99, and its yield rose to 4.3`% from its median auction yield of 4.19%.
The yield on the 3-month inched up to 0.19% from 0.18%.
Lending rates: A key bank-to-bank lending rate fell to its fourth straight all-time low Friday, suggesting the credit crisis is waning for many financial institutions.
The 3-month Libor fell to 0.94% from 0.96% Thursday, according to Bloomberg.com. The overnight Libor rate also fell, dropping to 0.23% from 0.24%.
Libor, the London Interbank Offered Rate, is a daily average of rates that 16 different banks charge each other to lend money in London. It is a closely watched benchmark and is used to calculate adjustable-rate mortgages. More than $350 trillion in assets are tied to Libor.
On Tuesday, the 3-month rate dropped below 1% for the first time since 1986, when the British Bankers Association started keeping records. 
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