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

The yield on the 10-year U.S. Treasury fell to 4.08% on Thursday, down from the one-month peak of 4.16% recorded earlier in the session. This decline was influenced by new signs indicating a softer labor market, which has bolstered arguments for a possible interest rate cut by the Federal Reserve next month. According to Challenger's data, layoffs in the U.S. experienced the most significant increase seen in October over the past 20 years, attributed to a shrinking consumer base and corporate cost-cutting measures. This development lends support to the dovish faction within the Federal Open Market Committee (FOMC), which has increasingly relied on private labor reports due to the ongoing data blackout from the Bureau of Labor Statistics (BLS). Despite this, the presence of elevated inflation and strong economic performance has led 30% of market participants to anticipate that the Fed might maintain interest rates unchanged next month. Furthermore, the ISM Services PMI exceeded expectations in October, with its pricing index reaching a three-year high. In a related development, the U.S. Treasury indicated that it will persist in focusing higher issuance volumes on bills rather than coupon securities, as the Federal Reserve emerges as a net purchaser of short-term securities to counterbalance the runoff of mortgage-backed securities (MBSs).