U.S. Treasury bonds fell on Monday as recession fears grew following a series of key economic data releases last week.
At 4:10 a.m. ET, the yield is 10 year government bond It fell more than 4 basis points to 3.7547%. 2 year treasury bond The yield last hit 3.7807% after falling more than nine basis points. On Monday, yields on 10-year and 2-year Treasury notes fell to levels they hadn’t seen in more than a year.
Yields and prices move in opposite directions. 1 basis point equals 0.01%.
On Friday, the July nonfarm payrolls report showed that the month’s job gains were just 114,000, below the Dow Jones estimate of 185,000 and the revised 179,000 in June. The jobs report also showed that the employment rate unexpectedly rose to 4.3%, its highest level since October 2021.
The data suggested a softening labor market, which raised concerns about a recession. This came after the Fed left rates unchanged earlier in the week and hinted at a September cut. But many investors have since questioned whether the central bank should have already cut rates to prevent a recession.
The market now increasingly expects a 50 basis point rate cut when the Federal Reserve meets in September. CME Group’s FedWatch Tool Showed.
Over the coming week, investors will be watching comments from Federal Reserve officials for clues about the economic and monetary policy outlook. The ISM’s services PMI, which tracks performance of service companies, is also due on Monday and is expected to rise to 50.9 in July from 48.8 in June.
