In the wake of the Federal Reserve meeting, notable fluctuations in the bond market have steered traders' focus towards the trajectory of the bond market, away from previous predictions of a 5% rate. Today, the non-farm payrolls report is set to further shape this perception, with deteriorating job data and rising unemployment potentially causing a further dip in Treasury yields and the dollar.
The bond market's recent instability, marked by a fall in 10-year Treasury yields from 5% to 4.65%, has resulted in a weaker dollar and stronger equities. This shift could be exacerbated by poor employment statistics, which could trigger a further decline in Treasury yields and the dollar while pushing equities and risk trades upwards.
The bond market's movements and the anticipation surrounding today's non-farm payrolls report underscore the shifting landscape for traders, who have moved from forecasting a 5% rate to closely monitoring the bond market's trajectory.
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