08.01.202603:29:45UTC+00US 10-Year Yield Extends Decline

The yield on the 10-year US Treasury dipped to approximately 4.14% on Thursday, continuing its downward trajectory for the week. This movement reflects investors' ongoing evaluation of Federal Reserve policy against the backdrop of the latest economic data. Notably, job openings in November decreased more than anticipated, pointing to a softening in labor demand, while growth in private payrolls for December also fell short of expectations. Conversely, ISM data revealed an unexpected uptick in service sector activity. Market participants are now keenly awaiting Thursday's weekly jobless claims and Friday's December employment report for additional insights into the labor market's health. Current market sentiment indicates an almost 90% probability that the Federal Reserve will maintain rates at their current levels later this month. Nonetheless, traders are factoring in two potential rate cuts by the US central bank within the year, driven by the belief that signs of disinflation will soon permit the FOMC to shift towards a more accommodative policy stance.