U.S. Treasury yields held steady on Monday, with the 10-year near two-month lows after a much stronger-than-expected October jobs report. Traders now wait for the October inflation report and a heavy week of Treasury auctions.
U.S. Treasuries held their ground on Monday, with benchmark yields pinned near two-month lows. The 10-year yield was flat at 4.859%, while the 2-year, the tenor most sensitive to Fed policy, edged up to 4.538%.
Payrolls beat forecasts by a wide margin
Employers added 165,000 jobs in October, nearly triple the 59,000 economists expected. The unemployment rate slipped to 4.1% from an expected 4.2%.
The report collided with a haven bid. A tech selloff on Thursday, the Nasdaq 100's worst day since 2020, had dragged yields lower, and Friday's data reversed part of that move by reviving the Fed's case for tightening.
CME's FedWatch put the odds of a quarter-point rate hike at the Dec. 8-9 meeting at roughly 77% after the report. The Fed held at 3.75%-4.00% last month in a 10-2 vote, with two policymakers dissenting in favor of a hike.
Inflation data and auctions test the market
The October consumer price index arrives Tuesday at 8:30 a.m. ET. September's report showed headline inflation accelerating to 3.7% and core to 2.6%, both above forecasts.
Since then, Brent has slid from about $104 to near $91 last week on hopes of an Iran diplomatic deal after the midterms, and markets will look for any sign that this relief is filtering through.
The Treasury sells $58 billion of 3-year notes on Monday, $42 billion of 10-year notes on Tuesday and $25 billion of 30-year bonds on Thursday. Demand at the long end will be a barometer of how the market digests supply with the 10-year near 4.9%.
Source: Investing.com
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