FX.co ★ Treasury Yields Fall, Jobs Report Eyed

The yield on the US 10-year Treasury note slipped to 4.14% on Wednesday, its third straight daily decline and the lowest level since mid-January. The move comes as investors look ahead to the upcoming US jobs report, with consensus forecasts calling for a 70,000 increase in nonfarm payrolls for January.

In addition, annual benchmark revisions are expected to reveal softer job growth over the past year, bolstering expectations that the Federal Reserve will deliver further interest rate cuts later this year.

On Tuesday, data showed that US retail sales were flat in December, defying expectations for a 0.4% rise. Following the weaker data, money markets are now assigning roughly a 25% probability that the Fed will implement three quarter-point rate cuts in 2026, up from pricing for just two cuts a week earlier.

At the same time, investors are closely watching developments in China after reports that authorities have urged domestic banks to trim their holdings of US Treasuries, citing concerns about concentration risk and market volatility.