Treasury yields fall amid signs of softening US employment

1551 ET – Treasury yields fall as data back the idea that U.S. employment is weakening fast enough to secure a third consecutive interest rate cut by the Fed next week. ADP says private employers shed 32,000 jobs last month. Weekly jobless claims tomorrow are expected to increase to 220,000 from 216,000, in a WSJ consensus. There will be no official payrolls data before the Fed meeting. Odds of a 25 basis point cut reach 89% on the CME’s FedWatch tool. The 10-year falls 0.016 percentage point to 4.724% and the two-year declines 0.031 p.p. to 3.485%. (paulo.trevisani@wsj.com; @ptrevisani)

Treasury Yields Fall Amid Private Payroll Job Losses

0829 ET – New signs of weakness in U.S. labor markets boost demand for Treasurys and sends yields lower. ADP says private employers shed 32,000 jobs in November, after adding an upwardly revised 47,000 jobs in October. Economists surveyed by WSJ expected the creation of 40,000 jobs. It is the last batch of labor data before next week’s Fed meeting, in which rates are expected to be cut by 25 basis points as a way to bolster employment. The 10-year is at 4.054% and the two-year at 3.475%. (paulo.trevisani@wsj.com; @ptrevisani)

Corrections & AmplificationsADP says private employers shed 32,000 jobs in November, after adding an upwardly revised 47,000 jobs in October.. An earlier version of this article incorrectly gave the ADP private payroll job loss as 31,000 in November. (Corrected Dec. 3)

U.S. Treasury Yields Mostly Fall, Dollar Weakens on Fed Rate-Cut Prospects

1051 GMT – U.S. Treasury yields mostly edge lower as expectations for Federal Reserve rate cuts grow and the dollar also falls. “A [rate] cut would narrow yield differentials with other major economies and weaken the dollar’s appeal for carry trades,” says Kudotrade’s Konstantinos Chrysikos in a note. Markets are also bracing for Wednesday’s ADP employment and ISM services PMI data, with consensus pointing to a cooldown in hiring and activity that could further reinforce rate-cut expectations, he says. The two-year Treasury yield falls 1.6 basis points to 3.499% while the 10-year yield is down 0.7 basis points at 4.081%. The 30-year yield, however, edges up 0.5 basis points to 4.746%, according to Tradeweb. The DXY dollar index falls 0.4% to 99.012. (emese.bartha@wsj.com)

Gilt Yields Fall as Markets Await U.S. Data

0839 GMT – Yields on U.K. government bonds, or gilts, decline, along with their eurozone and U.S. equivalents ahead of the release of U.S. macroeconomic data. U.S. ADP private payrolls data are due at 1315 GMT, import price data are due at 1330 GMT, and industrial production data at 1415 GMT. Weak data could increase prospects of the Federal Reserve cutting interest rates at its meeting next week. Markets price an 85% chance of a December rate cut by the Fed, LSEG data show. Ten-year gilt yields fall nearly 2 basis points to last trade at 4.463%, Tradeweb data show. (miriam.mukuru@wsj.com)

May 2029 Gilt Yield Steady Ahead of Auction

1000 GMT – The yield on the May 2029 gilt is little changed ahead of the U.K. Debt Management Office’s auction of 4.75 billion pounds of the bond at 1000 GMT. Investors are cautious ahead of the release of U.S. economic data, including ADP jobs data and industrial production data, on Wednesday. The May 2029 gilt yield is steady at 3.859%, Tradeweb data show. (miriam.mukuru@wsj.com)

Long-Dated Gilt Yields Could Fall Considerably as Budget Eases Fiscal Concerns

0923 GMT – Yields on long-dated U.K. government bonds, or gilts, are likely to decline significantly in the coming months after the recent budget eased investors’ fiscal concerns by raising the headroom to around 22 billion pounds, Panmure Liberum’s Joachim Klement says in a note. Anticipated interest-rate cuts from the Bank of England are also likely to push gilt yields lower. “We expect the gilt yield curve to flatten throughout most of 2026,” Klement says. The 10-year gilt yield last trades at 4.476%, Tradeweb data show.(miriam.mukuru@wsj.com)

Slowing Gilt Supply into 2026 Could Boost Performance, But Caution Is Warranted

0916 GMT – Supply of gilts is expected to slow down into 2026, which should support their performance, RBC Capital Markets strategists say in a note. Investors need to be cautious, however. The global fixed income sector faces a risk of weak performance, such as the recent selloff driven by concerns about the Bank of Japan raising interest rates in December, the strategists say. Another global selloff would likely be unfavorable for gilt investors, they say. (miriam.mukuru@wsj.com)

Betting on U.S. Bond Curve Steepening Is Set to Be a Favored Trade

0750 GMT – Steepeners—or trades betting on a widening gap between short- and long-dated bond yields—are set to be “the trade of choice” over the coming weeks in U.S. rates markets, says Jefferies’ Mohit Kumar in a note. If President Trump picks a Federal Reserve Chair who favors rate cuts, this would be an impulse to steepener trades, the global economist says. “While the Fed can control the front end of the curve, worries around inflation driven by an easier monetary policy will keep pressure on the long end,” Kumar says. A potential adverse Supreme Court ruling on tariffs could additionally dent revenue projections and raise fiscal concerns, he says.(emese.bartha@wsj.com)

U.S. Treasury Yields Move Lower as Data Awaited

0639 GMT – U.S. Treasury yields trade marginally lower in Asian afternoon hours as investors take a cautious stance ahead of ADP employment and ISM services data. “While services PMI figures are due from pretty much everywhere, it will be last month’s U.S. ISM survey that steals the lion’s share of participants’ attention, not least after the disappointing ISM manufacturing read on Monday,” says Pepperstone’s Michael Brown in a note. The two-year Treasury yield falls 1.6 basis points to 3.499%, while the 10-year Treasury yield is down 0.9 basis points at 4.078%, according to Tradeweb. (emese.bartha@wsj.com)

German 10-Year Bund Yield Finds New Anchor at 2.75%

0704 GMT – The cheapening dynamic in German Bunds is calming down, with a new anchor level found at 2.75% for the 10-year Bund yield, Commerzbank Research’s Erik Liem says in a note. “After taking out the 2.75% earlier this week, this level served as an anchor, with 10-year Bund yields hovering in a tight range close to it,” the rates strategist says. The German Finance Agency has completed its annual bond funding program for 2025, thus Bunds do not face any near term pressure from domestic supply. However, as usual towards the end of the year, investors await the release of the Finance Agency’s annual funding program which is expected to show an increase in gross supply in 2026 as Germany finances its fiscal expansion. (emese.bartha@wsj.com)

Government Bond Yield Curves Likely to Steepen in Eurozone

0628 GMT – Government bond yield curves in the eurozone are expected to steepen, Metzler analyst Leon Ferdinand Bost says in a note. Two-year German bond yields suggest a terminal rate by the European Central Bank rate at 2% but Metzler believes that the market underestimates the probability of an ECB rate cut, “as we see both growth and inflation risks tilted to the downside,” the analyst says. Meanwhile, 10-year Bund yields are expected to face upward pressure from the second quarter onward, driven by the German fiscal package, driving the 10-year Bund yield to 2.80% by end-2026. Metzler’s forecast is only slightly above Tuesday’s close of 2.749%. However, it will rise from around 2.50% in the first quarter, a level expected to be reached partly due to an ECB rate cut. (emese.bartha@wsj.com)

JGB Yields Rise as Expectations for BOJ Rate Increase Continue

0224 GMT — Japanese government bond yields are higher as expectations for a near-term rate increase by the Bank of Japan continue. The BOJ’s policy board is scheduled to meet on Dec. 18-19 for a final rate decision for the year. To gauge the economy’s strength, investors will be focusing on economic indicators, including household spending data due Friday. The 2-year JGB yield is up 1 basis point at 1.015% and the 10-year yield is 2 basis points higher at 1.875%. (kosaku.narioka@wsj.com; @kosakunarioka)