Treasury Sell-Off Eases
The yield on the U~S 10-year Treasury note topped 5.3% on Thursday, its highest level since early 2002, before retreating slightly to 5.27%. The bond market has remained under pressure amid expectations of further monetary policy tightening by the Fed, as persistent inflationary pressures from higher oil prices and the lack of a resolution to the Middle East conflict continue to weigh on sentiment. Concerns over the US fiscal and debt outlook, along with resilient economic data, have added to the pressure. The ISM Manufacturing PMI edged lower in September but still pointed to solid manufacturing activity, while the prices paid gauge soared. The jobs report due tomorrow will provide a fresh update on labor-market conditions and will help shape expectations for the Fed’s policy path. Traders have fully priced in a 25 bps rate hike by the Fed this year, although the probability of such a move in October has fallen to 34% from 70% last week.
27%. The bond market has remained under pressure amid expectations of further monetary policy tightening by the Fed, as persistent inflationary pressures from higher oil prices and the lack of a resolution to the Middle East conflict continue to weigh on sentiment. Concerns over the US fiscal and debt outlook, along with resilient economic data, have added to the pressure. The ISM Manufacturing PMI edged lower in September but still pointed to solid manufacturing activity, while the prices paid gauge soared.
The jobs report due tomorrow will provide a fresh update on labor-market conditions and will help shape expectations for the Fed’s policy path. Traders have fully priced in a 25 bps rate hike by the Fed this year, although the probability of such a move in October has fallen to 34% from 70% last week.