FX.co ★ US 10-Year Yield Plunges After ADP

The yield on the US 10-year Treasury note fell below 4.1% on Wednesday, driven by new indications of a decelerating labor market, which bolstered expectations for further interest rate cuts by the Federal Reserve. The ADP Employment Report revealed that private payrolls decreased by 32,000 in September, a stark contrast to the anticipated 50,000 increase, with the previous month's figures also revised to reflect a slight decline. This marks the survey's first consecutive decline since the COVID-19 disruption in the second quarter of 2020. These developments have intensified speculation that the Fed will implement two more rate cuts by the end of December. The report garnered heightened attention due to the uncertainty surrounding this week's BLS jobs report release, impacted by the US government shutdown. Additionally, bond markets were bolstered by a dip in consumer confidence as measured by the Conference Board, alongside a significant drop in voluntary quits reflected in the JOLTS data.