US Yields Rise on Shutdown Worries

The yield on the US inched higher to 4.13% on Thursday after the US government shutdown prevented the release of key economic data, injecting fresh uncertainty on Treasury securities and supporting concerns that the political standoff can impact growth.

The shutdown also risks the release of the BLS jobs report tomorrow, magnifying the pessimism from recent private labor data that held the 10-year yield firmly down this week.

Payrolls tracked by the ADP fell for two straight months for the first time since the Covid shock in Q2 2020.

Also, the JOLTS showed a sharp decline in voluntary quits and the Challenger report pointed to slower hiring.

The data consolidated the view of a significant slowdown in the US labor market, which drove the FOMC to restart its cutting cycle last month.

Rate futures show that markets priced two more rate cuts this year by the Fed, despite evidence of stubborn inflation.