FX.co ★ US 10-Year Yield Pressured by Soft Jobs Data

The yield on the US 10-year Treasury note hovered around 4.66% on Monday, staying under pressure after weaker-than-expected employment data tempered expectations of an imminent Federal Reserve interest rate hike. US nonfarm payrolls unexpectedly fell by 23,000 in July, and sizeable downward revisions to the previous two months further underscored signs of a softening labor market. Markets now assign roughly a 44% probability to a 25 basis point rate increase in September, down from 67% a week earlier.

Investors are now focused on key inflation releases due this week for additional guidance on the monetary policy outlook. At the same time, markets continued to monitor geopolitical developments in the Middle East after Iran denied holding direct talks with the United States, contradicting Washington’s assertion that a deal was near. Tehran reiterated that any agreement would require an end to the US naval blockade, the lifting of sanctions, and compensation for war-related damage.