FX.co ★ US 10-Year Yield Trim Pullback

The yield on the 10-year US Treasury note stood at 4.15% on Wednesday, moderating its earlier pullback to remain close to its four-month high. This stability arises amidst conflicting indicators from various economic data releases, which obscure the path of potential rate cuts anticipated from the Federal Reserve this year. The ISM survey indicated strong expansion in the sector's activity for December, highlighting robust growth and a revival in the employment index. Meanwhile, the ADP Employment Report showed an expected recovery in private-sector payrolls. On the flip side, the JOLTS report revealed that job openings fell more than predicted, reaching their lowest point in over a year, continuing the trend of limited hiring. Despite these mixed signals, markets expect the US central bank to implement two rate cuts this year, banking on emerging evidence of disinflation that could prompt the FOMC to adopt a more accommodative policy stance. Nonetheless, the inclusion of more hawkish Fed Presidents in the FOMC and signs of a strong economy have cast doubt on the likelihood of multiple cuts.