US 10-Year Yield Slides from 1-Month High

The yield on the 10-year US Treasury sank to 4.08% on Thursday from the one-month high of 4.16% earlier in the session as fresh evidence of a weaker labor market favored the argument for rate cut by the Federal Reserve next month.

Challenger data showed that layoffs in the US rose the most in 20 years for an October, citing a weaker consumer and cost-cutting corporate measures.

The result favored the argument for doves in the FOMC, which recently increased their dependency on private labor reports on the ongoing blackout from the BLS. Still, higher inflation and robust economic activity maintained 30% of the market to be positioned for a hold by the Fed next month.

The ISM Services PMI rose more than expected in October, while its price gauge rose to a three year high.

Meanwhile, the Treasury signaled it will continue to concentrate higher issuance volumes in bills instead of coupon securities, as the Fed becomes of net buyer of short securities to offset the run-off for MBSs.