FX.co ★ US 10-Year Yield Eases from 1-Month High

The yield on the 10-year US Treasury note dipped to 4.14% on Thursday, slightly down from the earlier one-month high of 4.16%. This fluctuation followed new indications of a weakening labor market, which strengthened the case for a potential rate cut by the Federal Reserve in the upcoming month. Recent data from Challenger highlighted a significant spike in layoffs in October, marking the largest increase in two decades. This has been attributed to declining consumer strength and cost-reduction strategies within corporations. These findings have bolstered the stance of the more dovish members within the FOMC, who have increasingly turned to private labor data due to the current blackout on BLS reports. Nevertheless, persistent inflation and strong economic indicators continue to support some expectations for the Fed to maintain interest rates at their current level next month. Notably, the ISM Services PMI exceeded forecasts for October, with its price component reaching its highest point in three years. Additionally, the Treasury has indicated its plan to focus on higher issuance volumes in bills rather than coupon securities, as the Fed resumes its role as a net buyer of short-term securities to balance the reduction in Mortgage-Backed Securities (MBS) holdings.