Commodities Friday, Nov. 7, 1986 : T-Bond Futures Off Sharply

Interest rate futures retreated sharply Friday, responding to an unexpectedly good employment report.

Treasury bond futures were down 1 9/32 points before the losses were trimmed near the close.

In other markets, grain futures were mostly higher, livestock and meat were mostly lower, and gold was lower but silver higher.

A Labor Department report showing that non-farm payrolls rose by nearly 300,000 and that total civilian employment expanded by 349,000 last month came a day after a Treasury bond auction that witnessed weak retail demand, leaving dealers with a lot of inventory, said Craig Sloan, an analyst in New York with Smith Barney, Harris Upham & Co.

“The auction left a bad taste in people’s mouths, and that was followed by a strong rise in non-farm payroll,” he said. “That was the one-two punch.”

Last month’s job growth coincided with a rise in the labor force, which left the civilian unemployment rate at 7%.

There were a number of reports for September indicating that the economy was improving, he said, but this was the first one for October. “This provided a weak tone for the whole day.”