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yesterday

Treasury Yields Rise Ahead of Record Auctions and Services Data

Weak payroll revisions coupled with high-profile leadership shifts at key economic agencies have heightened bets on an early Fed rate reduction.

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Overview

  • The 10-year Treasury yield climbed to 4.247% on Monday while the 30-year note reached 4.852% and the 2-year rose to 3.716%, pausing last week’s rally.
  • The Bureau of Labor Statistics revised May and June payrolls down by 258,000, fueling concerns about labor market strength.
  • President Trump dismissed BLS commissioner Erika McEntarfer over alleged data bias, and Federal Reserve Governor Adriana Kugler announced her resignation effective Friday.
  • Money market swaps now price about an 85% chance of a 25 basis-point Fed rate cut in September amid economic uncertainty and leadership turnover.
  • Traders are awaiting record $125 billion of three-, 10- and 30-year Treasury auctions and the ISM non-manufacturing PMI release later this week.