US Treasury Yields Decline After Weak Jobs Report
US Treasury yields fell Monday as a lackluster jobs report reduced investor expectations for further Federal Reserve interest rate hikes.
U.S. Treasury yields declined on Monday following a sharp selloff the previous week. The benchmark 10-year Treasury fell over one basis point to 5.255%, the 30-year bond declined one basis point to 5.614%, and the 2-year note yield dropped two basis points to 4.797%.
This downward movement follows a lackluster monthly jobs report released Friday, which reduced investor expectations for further interest rate hikes. According to the CME Group's FedWatch Tool, traders now price in a nearly 82% probability that the Federal Reserve System will keep rates unchanged at its next meeting.
Market participants are now awaiting the Institute for Supply Management's services activity report and the release of the Federal Reserve's September meeting minutes on Wednesday. These reports will help investors gauge the central bank's framing of the current tightening cycle and the neutral rate. Analysts at Deutsche Bank noted that the unsettled bond market makes incoming US data and Fed communication particularly relevant.
