FX.co ★ US 10-Year Yield Pulls Back

The yield on the 10-year US Treasury note experienced a slight decline, settling at 4.25% on Wednesday, which is close to the two-month low of 4.2% observed in the previous session. This shift was influenced by recent data indicating renewed signs of weakness in the labor market, which bolsters the argument for a potential rate cut by the Federal Reserve this month. The ADP report revealed a contraction of 33,000 jobs in June, marking the first decrease in over two years and standing in stark contrast to expectations for a rise of over 100,000 jobs. This outcome strengthens the perspective that the labor market may be increasingly sensitive to economic uncertainties, tariffs, and the extended period of high-interest rates. Attention now turns to the upcoming jobs report, which is expected to either confirm or refute the ADP report's implications. Meanwhile, the Senate has narrowly passed President Trump’s tax-and-spending bill, which is anticipated to augment the national debt by $3.3 trillion. The bill now returns to the House for final approval. Additionally, concerns over tariffs are intensifying, particularly in light of the absence of new trade deal announcements as next week’s deadline approaches.