FX.co ★ US 10-Year Yield Falls to 2-Week Low

The yield on the U.S. 10-Year Treasury experienced a significant decline, reaching 4.06% on Wednesday, marking the lowest level in two weeks. This movement came amid growing signs of a slowing labor market, bolstering expectations for further interest rate cuts by the Federal Reserve. According to ADP data, private sector employers reduced their workforce by over 11,000 jobs per week leading up to October 25th. Concurrently, Challenger data indicated a notable increase in job cuts. These developments were further underscored by the Michigan consumer sentiment index, which unexpectedly plummeted to its second-lowest level on record in November. The significance of these surveys was amplified as the ongoing government shutdown delayed the release of official data, prompting credit markets to anticipate greater demand for safer assets if official data confirms the anticipated economic deceleration once the Bureau of Labor Statistics (BLS), Bureau of Economic Analysis (BEA), and Census releases resume. Treasury securities, especially on the shorter end of the maturity spectrum, benefited from the Federal Reserve's acquisitions of bills to compensate for maturing mortgage-backed securities. Meanwhile, the auction for the new 10-year note witnessed a slight underperformance.