U.S. Treasury yields initially declined following Friday’s unexpectedly weak October employment report but rebounded sharply as traders discounted the distortions in the jobs data. Only 12,000 jobs were added in October, a significant slowdown from September’s revised gain of 223,000.

The 10-year Treasury yield, trading around 4.30% before the report, dropped to 4.23% before bouncing back to close the week at 4.37%, marking its highest level since July. Investors were quick to reassess the October report, noting that external factors, including hurricanes and strikes, likely affected the data.

October proved challenging for global bond markets, with yields rising worldwide. Speculation surrounding the U.S. election and the potential for not-so-bond-friendly fiscal policies of the new administration could heighten inflationary pressures. We highlighted these risks to the bond markets in our recent post.