Bond Market Volatility Ahead of Non-Farm Payrolls: Stronger Dollar Suppresses Rate Cut Expectations, Long-Term Yields Rise Across the Board

Glonghui January 8｜Driven by a stronger US dollar, US Treasury yields rose. Previously, Wednesday's ISM Services PMI data exceeded expectations, weakening the prospect of an imminent rate cut. Bas Kooijman of DHF Capital S.A stated in a report: "These data reinforce the view that the US economy remains resilient and support market expectations for a slightly more dovish stance from the Federal Reserve." The market's focus now shifts to the weekly initial jobless claims data to be released at 13:30 GMT and Friday's non-farm payroll data. If the data is weak, it could push yields lower. Kooijman pointed out: "Any unexpected move in either direction could trigger volatility in the forex and bond markets." According to Tradeweb, the yield on the 10-year US Treasury rose 1.9 basis points to 4.516%, while the 30-year yield increased by 2.7 basis points to 4.841%.