FX.co ★ US 10Y Yield Steadies Ahead of FOMC Minutes

The yield on the US 10-year Treasury note hovered near 4.48% on Tuesday as investors awaited the minutes from the Federal Reserve’s June meeting for fresh insight into the interest rate outlook. Data released last week showed a sharp slowdown in US job growth in June, along with downward revisions to payroll figures for the prior two months, prompting markets to scale back expectations for near-term rate hikes. At the same time, the latest ISM Services PMI signaled a modest cooling in services sector activity that was broadly in line with forecasts, with price pressures easing to their lowest level since February and employment registering its strongest increase since late 2021. Markets are now assigning roughly a 50% probability to a Fed rate hike in September, down from about two-thirds prior to the latest employment report. Investors are also watching for US trade deficit data due later in the day.