(Updates market action, adds quote)
NEW YORK, April 7 U.S. interest rates futures
rose on Friday as traders dialed back bets on the Federal
Reserve raising interest rates following a disappointing
payrolls report for March.
U.S. employers hired 98,000 workers in March, the fewest in
10 months and far short of an 180,000 increase forecast among
analysts polled by Reuters.
Some analysts blamed the poor payrolls reading partly on
harsh weather that hurt home building and store sales. They
expect a possible rebound in hiring in April.
"Weak readings in the construction and retail sectors likely
owed something to Winter Storm Stella," said Curt Long, chief
economist at the National Association of Federally-Insured
Credit Unions in Washington. "It would not be a surprise to see
a strong bounce back in April, as well as upward revisions to
the March figure."
The sharp decline in the jobs gain last month was offset by
a drop in the unemployment rate to 4.5 percent, a near decade
low, and a 0.2 percent wage gain that was in line with
The relatively meager hiring last month, coupled with
jitters following a U.S. missile strike against Syria on
Thursday, led traders to reduce bets on Fed raising rates in the
Some Fed officials in recent days said two more rate hikes
by year-end following a March increase would be appropriate if
the economy improves further.
Federal funds futures implied traders saw roughly a 66
percent chance the U.S. central bank would raise interest
rates to 1.00-1.25 percent at its June 13-14 policy meeting,
down from 71 percent late on Thursday, CME Group's FedWatch
They suggested traders priced in a 36 percent probability
the Fed would hike rates to 1.25-1.50 percent at its September
meeting, compared with 38 percent late Thursday.
Fed funds futures implied traders expected a 56 percent
chance the central bank raising rates to 1.25-1.50
percent in December, down marginally from Thursday.
(Reporting by Richard Leong; Editing by Chizu Nomiyama)