The yield on the 10-year US Treasury fell to around 4.14% on Thursday, extending this week’s decline as investors continued to assess the outlook for Federal Reserve policy in light of the latest economic data. Job openings dropped more than expected in November, signaling cooling labor demand, while private payroll growth in December was weaker than anticipated. ISM data, however, showed a surprise improvement in services-sector activity. Investors are now turning their attention to weekly jobless claims due Thursday and the December employment report on Friday for further insight into the labor market. Markets are currently pricing a nearly 90% chance that the Fed will hold rates steady later this month. Still, traders continued to price two rate cuts by the US central bank this year on bets that evidence of disinflation will soon allow the FOMC to have room for more accommodative policy.
