Yields on most U.S. Treasuries dropped to their lowest levels in nearly a month following weaker-than-expected job creation numbers and service sector activity. This has strengthened traders' expectations that the Federal Reserve may resume rate cuts this year. Yields on 2-year to 10-year Treasuries fell to their lowest since early May, influenced by an unexpected decline in the ISM services index, indicating the sector's first contraction since June last year.
Earlier, ADP Research reported the weakest private sector job growth in two years, boosting the bond market. The rally continued as the U.S. government is set to release broader non-farm payroll data, expected to show a slowdown. President Donald Trump responded swiftly on social media, urging the Fed to cut rates, a stance he has repeatedly advocated.
U.S. Treasury yields fell by 6 to 9 basis points, with the benchmark 10-year yield dropping to 4.37%. Traders in interest rate swap contracts have increased the likelihood of two 25-basis-point rate cuts by the end of the year, with a September move now seen as about 90% probable.
